The income tax department on Thursday amended its e-assessment scheme to align it with faceless assessment. Amending the e-assessment scheme launched last year, the Central Board of Direct Taxes (CBDT) notified changes to include change in nomenclature of scheme from 'E-assessment scheme' to 'Faceless Assessment Scheme'.
It also enhanced the scope of such faceless assessments to include 'best judgment assessments' in case a taxpayer is not cooperating with the tax authorities and advance intimation to a taxpayer that his assessment will be done under such 'Faceless Assessment Scheme'.
'Best judgement assessments' refer to tax assessments done as per the best of judgment of the tax officer, where the taxpayer does not co-operate or provide sufficient information for completion of assessment.
Under the amended scheme, Principal Chief Commisioner of Income Tax/ Principal Director General of Income Tax in-charge of National E-assessment Centre (NeAC) has been empowered to transfer case to jurisdictional Assessing Officer (AO) at request of taxpayer or under specified circumstances, which require personal hearing.
Also, powers have been granted to NeAC to either grant additional time to the taxpayer to furnish details or to forward its case for 'best judgment assessment'.
The amended scheme says where the assessee fails to file response to the notice within the time specified in the notice or within the extended time, if any, NeAC shall intimate such failure to the assessment unit.
The assessment unit shall, after taking into account all the relevant material, write a draft assessment order based on intimation received from NeAC to "the best of its judgement".
Nangia & Co LLP Partner Shailesh Kumar said the most important aspect of new procedure, is coverage of 'best judgment assessment' in Faceless Assessment Scheme.
Earlier, best judgment assessment in cases of non-cooperating taxpayers could be done only by jurisdictional AO.
Kumar said jurisdictional AOs may sometime be familiar with taxpayers and contact/ convince them to cooperate with tax authorities to duly complete the assessment proceedings, especially in cases where taxpayers would miss the notices inadvertently.
"Now, even in these cases, assessment can be done under Faceless Assessment scheme, based on instructions of the National e-Assessment Center'.
"Thus, taxpayers would need to be extra careful to comply with the notices issued by the National e-Assessment Centre, as missing of notices may result in issuance of adverse best-judgment orders, without the tax officer contacting/ convincing them to complete the proceedings," Kumar added.