Faceless Assessment Scheme and Tax Payers' Charter
The Cochin Chamber of Commerce and Industry conducted a Virtual CEO Forum Meeting on Saturday, 4th of September, 2020.
Shri Ravindra Kumar I.R.S., Principal Chief Commissioner of Income Tax, Kerala Region was the Speaker at the meeting. He spoke on “Faceless Assessment Scheme and Tax Payers' Charter".
The President of the Chamber Mr. V Venugopal welcomed the participants to the virtual meeting.
Mr. Kumar said that the tax system in India has seen major reforms lately aimed at simplifying the tax structure, bringing in ease of compliance and reducing litigation. On August 13, 2020, the Prime Minister launched a platform for ‘Transparent Taxation- Honouring the Honest.’ The platform comprises three reforms: faceless assessment, faceless appeals and the Taxpayers’ Charter. Faceless assessment and faceless appeals aim to eliminate physical interface between taxpayers and the tax authorities, thereby imparting greater efficiency and transparency to the assessment and appeal process. Mr. Kumar added that the objective is to make the tax assessments “seamless, painless and faceless’, where the physical interface is sought to be eliminated. It is expected that once successfully implemented, these changes will bring in transparency and objectivity in tax assessments, foster taxpayer’s trust and confidence, and boost voluntary compliance.
Mr. Kumar explained that under the new assessment scheme, the taxpayer and the tax official will not have any direct human interface. The entire assessment process will be divided into various units. The draft assessment will be done by one unit and this would be reviewed by a second unit and the final assessment will be done by yet another different unit. The allocation of cases to various units will also be automated under the Faceless Scheme of Assessment. This will create an anonymous system where the tax payer does not know who the tax assessing officer is as the function of assessment will be performed by various units and that too in the form of team and not an individual. This is a welcome step to ensure transparency, he said. The taxpayer will no longer be required to visit the Income Tax Office for assessment and appeals, he said.
As a major structural reform, the National e-Assessment Centre (NeAC) based in Delhi will now act as the single point of contact between the taxpayer and the tax department. It will facilitate and co-ordinate the proceedings in a centralized manner. At present, the exceptions to this scheme include cases of serious frauds, major tax evasion, search and seizure matters and international taxation cases, Mr. Kumar said.
Mr. Kumar said that during the Budget 2020 speech, the Finance Minister proposed to amend the provisions of the Income Tax Act, 1961 to authorise the CBDT to adopt a Taxpayers’ Charter with the objective of creating a tax system which will build trust between the taxpayer and the tax authorities. The Taxpayers’ Charter aims to treat taxpayers as honest individuals / entities and to provide them with fair and courteous treatment. It proposes to resolve issues in a time-bound manner and provide timely decisions to help taxpayers settle disputes without having to go through a long-drawn litigation process.
Concluding the meeting, Mr. Kumar said that the Taxpayers’ Charter also aims to provide complete and accurate information for tax compliance and endeavours to reduce the cost of compliance. On the other hand, the Taxpayers’ Charter expects the taxpayer to be honest and compliant in reporting all details to the tax authorities. As a good citizen, it will be the responsibility of the taxpayer to maintain accurate records, provide timely responses and make tax payments on time, he said.
Following this, there was a brief discussion wherein the Speaker clarified the issues raised by the participants.
The meeting ended with the Vice President of the Chamber, Mr. K Harikumar thanking everyone for having participated in the meeting.