Income Tax News The Modi government is reviewing the ‘faceless’ income tax assessment system to make it more convenient for taxpayers. A hybrid formula is being explored, allowing taxpayers to choose between a faceless scheme or an individual solution.
“It is being reviewed to assess its effectiveness,” an official told ET, adding that there is also a view that it should be made optional for the taxpayer. Another official said it is aimed at addressing the challenges faced in its implementation to make compliance easier for taxpayers. A final decision regarding this will be taken soon.
The scheme was launched on April 1, 2021. Under this, the Income Tax Department processes returns, issues refunds, assesses tax, conducts scrutiny and handles appeals. Cases are randomly assigned to the Assessing Officer without following geographical jurisdiction.
Although the assessment system has been established through video conferencing, there is a growing demand from both individual and business taxpayers to allow some personal interface. Experts said that evaluation is a complex exercise. This communication between the taxpayer and the tax officer can be more effective if they are interactive.
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Thus the case ends
“In large and complex cases, which require detailed explanations and large amounts of data to be submitted, taxpayers are sometimes not given enough time to prepare and upload their facts and arguments,” as a result, once the case goes to first-level appeal, it stalls. Goes, creating a backlog of cases at the Commissioner of Income Tax (Appeals) level “We face significant challenges.”
Difficulty in explaining business operations to Assessing Officers
Expert taxpayers’ affairs have also complained of difficulties in explaining business operations to assessing officers through video conferencing. For this reason orders are being passed against him. Another expert said startups or fundhouses face this problem the most. Such challenges include lack of specific option to seek investment, difficulty in uploading large files online and not giving enough time to taxpayers to respond to notices.