Income Tax Return: How taxpayers need to respond to e-assessments

Updated: September 23, 2019 8:09:58 AM

Technical submissions filed as e-responses by taxpayers should be comprehensive, and logical in structure for easy absorption

As per the procedures under the scheme, the national e-assessment centre, as a nodal agency, would facilitate the conduct of e-assessment in a centralised manner. (Illustration: Shyam Kumar Prasad)As per the procedures under the scheme, the national e-assessment centre, as a nodal agency, would facilitate the conduct of e-assessment in a centralised manner. (Illustration: Shyam Kumar Prasad)

By Sandeep Jhunjhunwala

The faceless and nameless e-assessment initiative was launched by Central Board of Direct Taxes (CBDT) to reduce visits by taxpayers to tax offices and their interface with the taxman, thereby bringing anonymity in proceedings using technology in order to ensure that vested interests do not obstruct the due course of law.

With the earlier set of instructions and notifications on e-assessments, the CBDT has now notified E-assessment Scheme 2019 as part of the government’s ambitious plan to usher in a countrywide paperless system of interface between the taxman and the assessee.

No human intervention
The scheme, effective from September 12, 2019, stipulates the constitution of e-assessment centers at national and regional levels, along with various administrative units in the form of assessment units, review units and technical units. As per the procedures under the scheme, the national e-assessment centre, as a nodal agency, would facilitate the conduct of e-assessment in a centralised manner. Though there would be no human intervention at the front-end under the scheme, a fail-safe mechanism has been prescribed to transfer the case to the jurisdictional assessing officer at any stage of the assessment.

The proposed e-assessment would transform the age-old assessment procedures of the income-tax department and the manner in which interactions currently occur between taxpayers and the taxman. There are a few significant limitations to the proposed system of e-assessment that needs to be kept in mind.

Currently, during the course of face-to-face assessment hearings, a taxpayer is in a position to explain technical rationale to the examining officer and clarify any doubts straightaway, thereby reducing the chances of any misinterpretation. Though it is not practical to develop a one-size fits all approach that could be followed under e-assessments, the taxpayers could consider a set of best practices, in tailoring their conduct.

Things to keep in mind
Technical submissions filed as e-responses should be clear and logical in structure for easy absorption. Commercial rationale of any anticipated adjustments to returned income should be explained in a lucid and coherent.

It may also be a good practise to provide a detailed memorandum explaining the basis of preparation of the return of income along with computation of taxable income, which may assist the officer at the assessment centre in understanding the key technical positions adopted by the assessee in arriving at taxable income.

The order sheet notings as provided by the assessment centre through electronic means to be examined assiduously and any deviations in the understanding should be formally communicated to avoid unjustified adjustments to returned income. In cases of request for previously filed documents, references to past submissions in the form of date and time of e-filing could be provided, instead of submitting the documents all over again without any such reference.

Request a delivery receipt option could be selected while sending e-mails to ensure that documents have landed in the recipient’s mailbox and the delivery receipt could be used as an acknowledgment for having sent the documents to the assessment centre. Data security is of utmost importance. Procedures need to be developed to ensure that e-assessment does not result in an uncalled-for injustice to the taxpayers.

The writer is director, Nangia Advisors (Andersen Global)

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