Mr. Hardik Maniar is a well-known Tax Consultant, Founder of H.C Maniar & Co. and Associate with Wisdom Business & Legal Consultancy. He is an expert in matters related with Direct (Income Tax) & Indirect Taxes (Customs & GST). He has his office in Gandhidham and Ahmedabad, Gujarat. Excerpts of a freewheeling interview…
Q.1. When will these changes come into force ?
Faceless assessment and taxpayers charter come into force from 13 August, whereas faceless appeal service will be available from 25 September.
Q.2. What is faceless proceedings?
Faceless assessment is income tax scrutiny proceedings eliminating the interface between the taxpayer and the income tax department. Under this system, the selection of a taxpayer will be done only through systems using data analytics and AI etc. Moreover, there will not be any territorial jurisdiction , and the draft assessment order, the review and the finalization will take place in different cities. Cases will be also be automatically allotted on a random basis through system.
Under this system, allocation of the appeals will be done through system and there would not be any interface between the commissioner & the appellant. There will also be no need to visit the officer or the office. The appellate decision will further be team-based and reviewed. Exceptions to this will be cases of serious frauds, major tax evasions, Black Money Act, Benami property etc.
Q.3. How will these changes benefit a taxpayer?
The effort is to make India’s tax system smoother, hassle free and citizen friendly. The portal for online compliances have been gradually developed by various governments since 2005-06. Once the routine compliances are made online, the natural progression is online scrutiny of income tax cases. The same was gradually developed over a period and has reached the stage where all the cases can be done online. In the faceless assessment there would be no direct or indirect contact between the officers and the assessee. All the honest tax payers will be immensely benefit from the same. The tax payers can directly upload their responses at their own convenience. Further, the interest of the honest tax payers will be guarded, as there will be multiple teams to verify the responses. Moreover, there will be transparent and open record maintaining systems, where each and every response and each and every notice will be available as a record, for a longtime. This would eliminate the chances of any misrepresentation of facts later. Thus it can be said that the reforms are aimed at bringing about more trust, fairness, transparency, efficiency, accountability, ease and convenience and therefore, more compliance.
Q.4. What is the benefits of taxpayer charter introduced by the government ?
- To provide fair, courteous and reasonable treatment: The tax department will provide prompt, courteous and professional assistance in dealings with the taxpayer.
- Treat taxpayer as honest: The income tax department shall treat every taxpayer as honest unless there is a reason to believe otherwise.
- To provide mechanism for appeal and review: The tax department shall provide fair and impartial appeal and review mechanism.
- To provide complete and accurate information: The department shall provide accurate information for fulfilling compliance obligations under the law.
- To provide timely decision: The department shall take decision in every income-tax proceeding within the time prescribed under the law.
- To collect the correct amount of tax: The department shall collect only the amount due as per the law.
- To respect privacy of taxpayers: The department will follow the due process of law and be no more intrusive than necessary in any inquiry, examination or enforcement action.
- To maintain confidentiality: The department shall not disclose any information provided by the taxpayer to the department unless authorized by law.
Q.5. Can you please provide what is contained in the tax payer charter ?
The 14 Point taxpayer charter includes the following
- Provide fair, courteous, and reasonable treatment
- Treat taxpayer as honest
- Provide mechanism for appeal and review
- Provide complete and accurate information
- Provide timely decisions
- Collect the correct amount of Tax
- Respect privacy of taxpayer
- Maintain confidentiality
- Hold its authorities accountable
- Enable representative of choice
- Provide mechanism to lodge compliant
- Provide a fair and just system
- Publish service standards and report periodically
- Reduce cost of compliance
Q.6. What are changes in power of income tax department in conducting survey ?
At present the powers of conducting survey are with the field offices as well as with the investigation wing of the department. Since the new scheme is aim that reducing the inter face between the tax payer and the field officers, the power of conducting survey has been withdrawn from the field offices.
Q.7. Are the appeals also going to be online ?
Yes, till now the filling of appeals were done online. However, from now onwards the pending with CIT(A) will be conducted online and faceless. The appeals pending with income tax appellate tribunal (ITAT) will be conducted as earlier.