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Budget 2023: Faceless assessments are game changing, but should be less taxing

Budget 2023-24: Faceless income tax proceedings are a success. But Budget 2023 must signal to the tax department the virtues of fair hearing, predictability in final orders, and focused proceedings

January 24, 2023 / 09:20 PM IST
The Government was forced to make faceless proceedings mandatorily applicable during the lockdown phase. 
(Representative image)

The Government was forced to make faceless proceedings mandatorily applicable during the lockdown phase. (Representative image)

The process of conducting tax proceedings electronically started in 2015. Paperless Assessment Proceedings scheme was launched through which selected non-corporate taxpayers were allowed to respond to various tax notices and assessments electronically.

Thereafter, a high-level committee was set up to prepare a road map for conducting the entire income tax proceedings in a faceless and nameless manner. Based on the recommendations, e-assessment scheme was introduced in 2018 paving the way for assessment proceedings to be conducted digitally.

Improvisations aplenty, some judicial strictures too

Subsequently, further improvisation rectified the practical difficulties faced by taxpayers and tax administrators, while expanding the scope of e-proceedings. What started with automation of assessment proceedings has been expanded to penalty proceedings as well as proceedings conducted by the Dispute Resolution Panel.