Cross-border tax cases outside faceless assessment scheme: CBDT | The Financial Express

Cross-border tax cases outside faceless assessment scheme: CBDT

Ever since the government the faceless assessment regime started, it excluded scrutiny cases falling under the International Tax and Central Charges (that is involving search and investigation) from within its purview.

Cross-border tax cases outside faceless assessment scheme: CBDT
The income tax Faceless Assessment Scheme was launched in 2019. NaFAC acts a nodal agency and single point of contact between the taxpayer and the tax department.

The Central Board of Direct Taxes (CBDT) has said that information related to compulsory scrutiny of cases in “International Tax and Central Charges” will not be transmitted to the National Faceless Assessment Centre (NaFAC) unless the case itself is transferred.

In a recent clarification on its guidelines for selection of returns for scrutiny, the CBDT has further said that communication to NaFAC for access and further action after selection for compulsory scrutiny will also not apply to these areas.

The income tax Faceless Assessment Scheme was launched in 2019. NaFAC acts a nodal agency and single point of contact between the taxpayer and the tax department.

Ever since the government the faceless assessment regime started, it excluded scrutiny cases falling under the International Tax and Central Charges (that is involving search and investigation) from within its purview.

Also Read: “Savings rate at 19-year low in H1FY23”

This was largely due to the complexity of issues involved that often required for face-to-face interactions. The assessment was done by the jurisdictional tax officers in these cases although initial notices were being sent from the e-assessment office, experts said. There was also some expectation that these cases too could be brought under the Faceless Assessment Scheme.

The Finance Ministry had in May this year laid down guidelines and procedures for compulsory selection of scrutiny cases in the fiscal 2022-23 but it was silent with respect to cases falling under the International Tax and Central Charges.

Tax experts have welcomed the clarification and said it removes ambiguity on the issue.
“The government has clarified that role of NaFAC in such cases would only arise in cases where the case is transferred to it and in all other cases, NaFAC will not be required to act as a point of contact and hence information need not be transferred to it,” said Sachin Garg, Partner, Nangia Andersen LLP.

The clarification has come at an opportune time and highlights government’s intention to remove system-driven bottlenecks both for the taxpayer and the tax department and ushering tax transparency, he further said.

Saurrav Sood, Practice Leader – International Tax & Transfer Pricing, SW INDIA noted that income tax authorities have come out with the clarification wherein they have continued to keep the international tax cases out of the purview of faceless assessment.

“This is a continuance of welcome news for the non-resident tax payers or tax payers having transfer pricing matters, since such matters involve technical issues on interpretation of law and understanding of facts where in-person interaction always comes handy,” he said.

In scrutiny of cases, the income tax officers conduct a detailed assessment of the return filed to verify the genuineness of the sources of income and tax paid by the assessee.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 10-12-2022 at 01:45:00 am
Photos
6 Photos
Republic Day 2023 full dress rehearsal at Kartavya path in full glory – See Glorious Pics
7 Photos
Indian Railways’ Chhatrapati Shivaji Maharaj Terminus makeover to preserve grand heritage of the iconic structure – See PHOTOS
12 Photos
First look! This is how the new Parliament will look from inside – Check latest PHOTOS