E-mail income tax scrutiny is the way to go

The success of the pilot scheme “E-mail based communication for Paperless Assessment Proceeding “ in five metro cities – Delhi, Mumbai, Chennai, Bengaluru and Ahmedabad — has led to its extension to Kolkata and Hyderabad, covering all taxpayers. But, the real challenge is to convince people to accept this mode.

When the income tax department agreed for launching a scheme for paperless scrutiny through e-mails, there was a lot of skepticism about its acceptability both by the officials in the department and also the taxpayers.

But, the results of the pilot launched in the five metro cities – Delhi, Mumbai, Chennai, Bengaluru and Ahmedabad – are quite encouraging.

While the department completed 477 cases of scrutiny in Mumbai through this mode within a short time-frame, the numbers in Chennai, Ahmedabad, Delhi and Bengaluro stood at 281, 128, 69 and 46 respectively.

The success has led to the extension of this scheme to two more cities, Kolkata and Hyderabad, and also to the all categories of taxpayers, which was earlier restricted to the non-corporate charges in the current year.

The real challenge though for the income tax department in making this scheme popular is removing the apprehension of the people about being scrutinized through the digital mode which is obviously transparent and every communication is recorded.

Considering the benefits, if people are convinced, more and more taxpayers would start agreeing to it, which has been a problem with the pilot. Only 299 people out of 754 approached, gave their consent in Bengaluru, 541 (1790) agreed to it in Mumbai, 290 (1633) in Ahmedabad, 544 (1555) in Chennai and 138 (749) in Delhi.

The directorate of systems is now considering a proposal to attach a small note to the system generated scrutiny notices informing the concerned taxpayer about the paperless scrutiny procedure to avoid problems and delay in obtaining consent.

Of course, those not willing to go for e-mail based scrutiny will not be forced to do so.

Once the scheme gets institutionalized, and a fair, transparent, system-driven, paperless and faceless assessment process is in place, it is expected that only those few cases where the department and the taxpayers have serious disagreements will go into litigation.

The added benefit of the tax department would be that any official sitting in any office across the country could be assigned scrutiny of a taxpayer’s return submitted anywhere.

Going ahead, the Central Board of Direct Taxes has also planned to develop mobile-based applications for paperless-assessment to ensure fast communication and compliance.

That clearly would take the handling of income tax to a new level.