CBDT Rolls Out E-Assessment of Income Tax: What You Need to Know

The new system would mean no physical interaction between a taxpayer and a tax officer.

E-Assessment of ITRs was rolled out by FM Nirmala Sitharaman on Monday.

(Photo: The Quint)

Finance Minister Nirmala Sitharaman on Monday, 7 October, inaugurated the income tax department's national e-assessment centre (NeAC). The I-T office’s new system of assessing income tax returns (ITR), which will come into effect from Tuesday, was announced by Sitharaman in the Union Budget, earlier this year.

Here’s a ready reckoner for the taxpayers on how the new assessment system operates.

What does e-assessment of ITR refer to?

To put things simply, the assessments would now be faceless and paperless. All communication will be conducted electronically and an assessee or his representative will not have to be physically present.

The proceedings, including refunds, will be carried out without any physical interaction between a taxpayer and a tax officer.

What’s the rationale behind the move?

The government believes that faceless assessment of ITRs will result in cutting down of harassment by taxmen.

“The new initiative shall impart greater efficiency, transparency and accountability in the assessment process. There would be no physical interface between the tax payers and the tax officers,” the finance ministry said in an official statement.

How will e-assessment work?

Under the new system, taxpayers will receive notices on their registered emails and registered accounts on the I-T department’s official portal www.incometaxindiaefiling.gov.in.

Those who register on the portal will also receive SMS alerts.

These communications will have a Documentation Identification Number (DIN), in order to track the proceedings on a particular ITR assessment.

The national e-assessment centre will serve notices to assessees specifying issues for selection of their case for assessment.

How will a taxpayer reply to a notice?

Taxpayers will have to reply to any notice or letter from the I-T department electronically through their account on the e-filing portal, within 15 days of receiving the notice.

The e-assessment centre will then allocate the case to an assessing officer using an automated system.

But a tax officer is still involved. What’s the difference then?

According to a notification by Central Board of Direct Taxes (CBDT), the tax officer will be assigned using an “automated allocation system”, run on an artificial intelligence-operated algorithm.

This would mean that an assessee in one city could well be assessed by officers in another city.

Is there any exception to the e-assessment rule?

The income tax department has issued a list of exceptional cases where e-proceedings will not be carried out: Cases where the Income Tax Return (ITR) was filed in the paper mode and the assessee concerned does not yet have an e-filing account; assessment being framed in non-PAN (permanent account number) cases; and cases where there are administrative difficulties, complex cases or where there are certain extraordinary circumstances.