Anonymous, at a distance: How faceless assessment will help taxpayers

Facing a tax official, whether for assessment, appeal or any other tax administration related issue, can be intimidating. With the implementation of the faceless assessment initiative, people won’t need to visit the tax office in person anymore. The Faceless Appeal service will commence from September 25.

“Faceless Assessment is meant to eliminate physical interface between the taxpayer and the Assessing Officer (AO) during the assessment proceedings. The taxpayer will not know the name and location of the officer handling his case. His identity will remain anonymous during the entire process,” said Naveen Wadhwa, deputy general manager at Taxmann company.

A central agency, National e-Assessment Centre (NeAC), will act as the gateway for communication between taxpayers and the authorities. “Regular AOs will no longer have the power to conduct surveys and search. This will reduce the unnecessary harassment of taxpayers. Only the investigation and tax deducted at source (TDS) wing will have this power, and that too only after authorisation from a senior official of the director general or principal commissioner rank,” said Kapil Rana, founder and chairman, HostBooks.

Taxpayers will be selected for assessment and other procedures through a system that uses data analytics, artificial intelligence and machine learning. Territorial jurisdiction is likely to be abolished. A taxpayer could belong to one city and they could be assessed in another. Allocation of cases will be automated and random. The draft assessment order could be issued from one city, the review could happen in another, and finalisation in a third. Only notices will be issued centrally. Rana said: “All assessments and review allocations will be a team-based exercise. The identity of the tax authority and the team will remain concealed.”

Some cases have been excluded from faceless assessment. “The exceptions include serious frauds, major tax evasion, sensitive and search related matters. International taxation and cases falling under the Black Money Act & the Benami Property Act are also excluded,” said Rana.

Exceptions can be made in cases where the assessee feels the need for a personal hearing. “An assessee may request for a personal hearing to make oral submissions or present his case.” In such cases, a hearing will be conducted through video conferencing,” said Wadhwa.

“An I-T authority, with approval from the chief commissioner or the director-general in charge of the regional e-assessment centre, can permit a personal hearing,” said Rana.

The objective of faceless assessment is to make tax administration objective, transparent and corruption-free. Experts hope this will reduce delays in tax assessments and audits, as the computerised system will automatically flag unwanted actions.

Sometimes, it is easier to explain a matter face-to-face than over mail, especially for people not well-versed in English. “Face-to-face interaction makes it easier both for the assessee to explain and for the officer to understand. Hence, in complex matters, opt for video conferencing. In addition, attach elaborate submission to rule out doubts of any kind,” says Wadhwa.

How faceless assessment will work

The NeAC will issue notice/communication to the assessee via email

The assessee will have to reply, via the e-filing portal, within 15 days of its receipt

The centre will assign the case to an assessment unit and a technical unit for review

NeAC will collect review details and send it to the Regional Electronic Assessment Centre, which will examine and draft the assessment order

The assessee will be given a chance to defend his case