With the tax department disposing of about 14 per cent of the 58,000 cases selected in the first phase which was launched last October, Central Board of Direct Taxes (CBDT) Chairman Pramod Chandra Mody said faceless assessment would help in removing the discretion of individual tax officers along with bringing in a time-bound process for resolving any mismatches in assessments.
The Income Tax (I-T) department will also consider adding more items of information for a taxpayer as it moves towards providing more auto-filled details of financial transactions in the income tax returns (ITR), a step forward from the latest revised Form 26AS where all high-value transactions are going to be reflected to the taxpayer in the form. This would help in voluntary compliance and result in less mismatches and hence, less scrutiny from the tax department, Mody told The Indian Express on Monday.
“Earlier the assessment was linked to a territory to which an assessee is linked. In a way, the taxpayer was bound by that. A lot of things would depend on the discretion of an assessing officer. We have completely revamped it. Instead of territorial jurisdiction, we have brought in dynamic jurisdiction. This means that the return is getting filed electronically, now whether the assessment is happening at ‘X’ or ‘Y’, it doesn’t matter,” he said.
Mody said though the process started in October, it has been operationalised now. “We are now getting the results. We have done about 8,000 assessments and so far the experience is that it has worked well. In the first phase, we put 58,000 cases under the process; from that, 8,000 cases have been assessed without any additions (to tax demand). Among these taxpayers, nobody was required to report to an I-T office because he doesn’t know here the process is happening,” he added.
About 300 cases have required review in the tax demand, Mody said, adding that the process will happen without the taxpayer required to go to tax offices.
The CBDT Chairman also said that ultimately the tax administration will move to a digital platform, with assessments to appeals to be conducted online. “PAN is also digital, e-filing is digital, notices are going electronically, assessment is also being done electronically, and in future appeals will also happen through electronic method,” he said.
Going ahead, the tax department will add more items of information in the Form 26AS and ITRs including details of property transactions, share market transactions and any other linked financial activity such as GST. “As we go further, all information will be collected and given at one place. As a common taxpayer, any economic activity which results in any profit, if it’s available at one place, then it will stay in my mind during return filing. It’s like a tick box, one can keep ticking this is correct or this is incorrect and needs to be changed. It will facilitate correct filing of return and when the correct filing is done, correct taxes get paid. And once the correct taxes are paid, where is the question of any scrutiny. Scrutiny will only come for the mismatch. And if it comes as well, so then it can be explained in this manner. This will also result in lesser litigation since disputes will be reduced,” he said.
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