New Delhi, September 25: The Central Board of Direct Taxation (CBDT), under the Union Finance Ministry, on Friday launched the faceless income tax appeals. With this new scheme, all the income tax appeals would be finalised in a faceless manner and digitally. However, claims under the appeals relating to serious frauds, major tax evasion, sensitive & search matters, International tax and Black Money Act will not be monitored under the system.
Informing about the latest development, the Union Finance Ministry said, "Income Tax Dept launches Faceless Income Tax Appeals. All Income Tax appeals will be finalised in a faceless manner with exception of appeals relating to serious frauds, major tax evasion, sensitive & search matters, International tax & Black Money Act." Income Tax Return Filing Update: Finance Ministry Provides 'ITR Filing Compliance Check' Functionality for Commercial Banks to Keep Track of Cash Withdrawals by Non-Filers.
Earlier on August 13, 2020, Prime Minister Narendra Modi, while launching the Faceless Assessment and Taxpayers’ Charter as part of 'Transparent Taxation - Honoring the Honest' platform, had said that 'Faceless Appeals' would be launched on September 25 on the birth anniversary of Pt. Deen Dayal Upadhayay. The move is aimed at simplification of tax processes and for ease of compliance for the taxpayers.
What is Faceless Income Tax Appeals?
With the introduction of faceless Income Tax appeals in the IT Act, the government to aims to ensure that taxpayers are free from tax harassment of any kind. Through this, the IT department will now scrutinise all the documents of the assessee electronically in case of a default. The government claims that the power of authorities to arrest and freeze of accounts will be reduced. Also, there will reduction of cases in corruption, bribery and tax harassment.
What Comes Under Faceless Appeals?
1) e-allocation of appeal
2) e-communication of notice/ questionnaire
3) e-verification/e-enquiry to e-hearing
4) e-communication of the appellate order
The government said, "There will be no physical interface between the taxpayers or their counsel/s and the Income Tax Department. The taxpayers can make submissions from the comfort of their home and save their time and resources."
What Will it Include?
The new system will include allocation of cases through Data Analytics and Artificial intelligence under the dynamic jurisdiction with central issuance of notices which would be having Document Identification Number (DIN).
The Ministry stated, "The draft appellate order will be prepared in one city and will be reviewed in some other city resulting in an objective, fair and just order." The government also aims that Faceless Appeal will ensure just and fair appeal orders and minimise any further litigation. Also, it will bring, greater efficiency, transparency and accountability in the functioning of the Income Tax Department.
Experts had opined that this is a very move as there is a probability that the tax demand may be enhanced at Commissioner of Income Tax (Appeals). Also, some have raised doubts about the implementation of the scheme as even the Goods and Services Tax (GST) system is still not flawless. Apart from this, a human error may trigger an investigation and would require correction by the assessor. Without a face to face interaction, explaining the mistake will be a very difficult task for the assessee.