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Faceless tax assessment: A good step towards transparency, but implementation holds the key

Artificial Intelligence and data analytics based systems will be used to identify the tax-payers for sending assessment notices

August 17, 2020 / 11:14 PM IST

Ashwini Kumar Sharma

With the aim of making the tax system seamless, painless and faceless, Prime Minister Narendra Modi announced the implementation of a few major reforms in the taxation system—honouring the honest, releasing a tax charter, starting faceless assessment and faceless appeal. While the taxpayer charter and faceless assessment will come into effect from today, i.e., August 13, 2020, faceless appeal will be applicable from September 25, 2020.

Not face-to-face anymore

Implementation of the faceless assessment scheme is set to eliminate the human interface between the taxpayer and representatives of the income tax department. Most industry participants welcome the implementation of the scheme by the government. “The PM has laid down an excellent vision of completely faceless assessments and also soon to be launched faceless appeals. The new taxpayers’ charter is based on easing compliance for all taxpayers and we welcome the initiative,” says Archit Gupta, founder and CEO, ClearTax.

In future, under the faceless assessment schemes, Artificial Intelligence (AI) and data analytics based systems will be used to identify the tax-payers for sending assessment and scrutiny notices. One of the major advantages of the scheme will be that from now onwards there will be no territorial jurisdictions, which means a tax payer’s ITR can be assessed by any assessing officer across the country. Taxpayer identity will not get disclosed and in any case taxpayers will not be required to visit the income tax office or meet assessment officers for any work.


Tax experts believe that the schemes will help taxpayers in many ways and also enhance trust in tax authority and its functionality. “It will eliminate the short cut methods in taxation completely. In this scheme the control of assessments will be done by a central nodal team. The assessing officer and taxpayer shall not know each other at all. Hence the entire process will be only on merits,” said Vivek Jalan, partner, Tax Connect Advisory Services LLP.

Change in functioning style required

However, Gupta believes that, “the policy announcements must also reflect in the functioning of tax administration, tax officers need to be trained and focus needs to shift from merely raising tax orders to supporting taxpayers and truly streamlining assessments.”

With the implementation of the new faceless assessment scheme, all the assessment orders will now be issued online. “CBDT directs that all assessment orders shall be passed by the National e-assessment centre (NeAC) through faceless assessment scheme, 2019; Provides 2 exceptions: (1) assessment orders in cases assigned to Central charges; and (2) assessment orders in cases assigned to International Tax charges; Specifies that assessment orders not in conformity with above shall be treated as ‘non-est’; States that this order shall come into effect from 13th August 2020,” said Amit Maheshwari, tax partner, AKM Global, a consulting firm.

Assessments and cases related to major tax evasion, tax frauds and so on are kept outside the ambit of faceless assessment schemes.

(The writer is a freelancer)
first published: Aug 13, 2020 02:38 pm
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