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E-ASSESSMENTS

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E-ASSESSMENTS

Have you received any scrutiny notice from the Income Tax department? Don’t worry now the government has introduced E–ASSESSMENTS to complete processing of income tax cases. As per Government it will ensure greater transparency and accountability and hence reduction in harassment and other malafide practices by tax authorities in Income Tax Scrutiny Process.

The Central Board of Direct Taxes (CBDT) on 12th of September 2019 has notified the much awaited E-ASSESSMENT i.e. faceless scrutiny procedure via Notification no. 61/2019. Followed by this notification department issued another Notification via 62/2019 giving effect to the income tax E-ASSESSMENT Scheme 2019.

What is E-Assessment?

After the filling of income tax returns by assesses generally they sit back and relax but sometimes a notice for scrutiny from income tax department may give rude shock to the assesses by disagreeing with the calculations as reported while filling their income tax return. The department sends Intimation U/s 143(1) of the income tax department showing side by side the computation of income tax as done by the assesses as well as by the department. A discrepancy often means a demand for more taxes, which you may have to pay up. Further, if sometimes the income tax authorities consider it necessary to ensure that the assesses has not understated income, computed excessive loss or underpaid taxes, they will serve a notice under Section 143(2), requiring the assesses to meet the assessing officer on a particular date and/or produce any evidence in support of the return. This is commonly called ‘scrutiny assessment’.

Under the E-Assessment scheme, a taxpayer would not be aware of the Income tax officer who carries out the assessment, as it could be an officer located in any part of the country.

Basic Procedure of E-assessments:

  1. E-assessment is applicable to scrutiny assessments under Section 143(3) of the Income tax act, 1961.
  2. There are three parties involved in E-assessment procedure, i.e. National e-assessment Centre, Regional e-assessment Centre and assessee.
  3. The National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143, specifying the issues for selection of his case for assessment;
  4. The assessee may, within 15 days from the date of receipt of notice above file his response to the National e-assessment Centre ;
  5. Assignment of assessment case to specific assessment unit of Regional e-assessment Centre through an automated allocation system by National e-Assessment Centre for the purpose of e-assessment.
  6. The assessment unit shall, after taking into account all the relevant material available on the record, make in writing, a draft assessment order either accepting the returned income of the assessee or modifying the returned income of the assesse, as the case may be, and send a copy of such order to the National e-assessment Centre. While making draft assessment order, details of the penalty proceedings to be initiated therein, if any, shall be specified by the assessment unit.
  7. The National e-assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to –
  1. Finalise the assessment as per the draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment;
  1. Provide an opportunity to the assessee, in case a modification is proposed, by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order; or
  2. Assign the draft assessment order to a review unit in any one Regional e-assessment Centre, through an automated allocation system, for conducting review of such order; calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order.

For Detailed procedure refer to Notification no. 61/2019 & Notification via 62/2019

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