Framers of Indian Constitution have set forth an enormous and unique challenge of simultaneously completing India’s triple transition across social, political and economic fields. India is one rare country of this size and complexity that has taken on the challenge of getting on to the three transitions together. Technological advancements and India’s ability to execute gigantic projects have allowed the country to score many wins. Timely and transparent conduct of elections is well noted and appreciated across the world, so is the quick and large scale adoption of ATMs, digital payment methods and online train ticket booking systems. Recent success of world’s largest vaccination program highlights India’s increasing prowess of large scale digital enabled on-ground activities execution. One such domain on the horizon is faceless tax assessment.
Covid has disrupted many processes, yet it provided an opportunity, almost forcibly, to expand the horizons of digital-ready processes to flourish. By eliminating the physical interface between assessee and the tax officer to the extent technologically feasible, the faceless scheme launched in 2020 has led to a very high level of transparency to the process of assessment of income tax. This has resulted in significant time and energy savings for the taxpayers and brought in transparency and credibility to the government. Close analogy to this is online ticket booking, where an individual had to spend hours queueing up for tickets or pay hefty commission to agents. As online ticket booking had shown that the Indian consumer is savvy, so is online faceless assessment showing that Indian taxpayers are savvy.
National e-Assessment Centre (NeAC) facilitates and centrally controls e-assessment. Regional assessment centres are in cities like Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Pune, Bangalore and Hyderabad. Each of these centres have four units – assessment, verification, technical and review. Assessment units identify issues, seek information and analyse material to frame draft assessment orders. Verification units make enquiries, examine books of accounts and witnesses, and record statements. Technical units provide services such as advice on legal, accounting, forensic, information technology, etc. Review units check whether or not the facts, relevant evidence and low and judicial decisions have been considered in the draft order.
Surely, the digitisation of tax processing requires individuals and businesses to have the documents and information in electronic form, as well as the credentials of income tax portal to be regularly used for notices and filings. What has all this resulted into – “CBDT issues refund of over ₹1,62,448Cr to more than 1,79,00,000 taxpayers from 1st April, 2021 to 24th Jan, 2022. Income Tax refund of ₹57,754Cr have been issued in 1,77,35,899 cases, and Corporate Tax refund of ₹1,04,694Cr have been issued in 2,23,952 cases. This includes 1.41Cr refunds of AY 2021-22 amounting to ₹27,111Cr.”
Faceless assessment And Taxpayers Chartered provisions are paving way for manifold increase in number of filed returns and reduction of scrutiny needs. The structure of faceless taxation shows the modular approach to structure such tasks, perhaps the recipe for large scale implementations!
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