Tax Department To Use Skype-Like Applications For Personal Hearings With Assessees

The taxman will use video-telephony applications like Skype to ensure assessees get personal hearing with authorities for making submissions if their cases come under scrutiny.

That’s a marked shift from the earlier practice of issuing summons to taxpayers to appear before the authorities. It’s also part of the government’s initiative to promote faceless and electronic assessment of tax returns, named E-assessment Scheme 2019, the Income Tax Department said in a circular today.

The department will establish facilities for video conferencing to ensure the assessee is given a personal hearing once the draft assessment order picked up for scrutiny is modified, according to the scheme. Personal hearings through video-telephony, the circular said, would be provided to taxpayers after their cases are picked up for scrutiny, and if the taxman proposes a modification in the assessment order.

The department conducts assessments to ensure taxpayers don’t understate incomes or overstate expenses and losses.

The interaction between authorities and taxpayers on assessments, appeals and refunds have been a source of discontent among the latter following allegations of harassment and corruption, said Sunil Agarwal, partner at AZB & Partners. “It’s hoped that this new dispensation leads to transparency and efficiency, save time of tax-payer from visiting tax offices, eliminate opportunities for corruption, and thus address taxpayer grievances.”

Most communication between taxpayers and authorities will be through e-mails, thereby obviating the need to interact with authority in person, he said.

The use of artificial intelligence, machine learning, video conferencing, telecommunication application software, mobile applications in e-assessment process are few measures which emerging economies adopted long ago, said Rakesh Nangia, managing partner at Nangia Advisors (Andersen Global).

How Electronic Assessments Work

Tax notices will be sent electronically to assessees under Section 143 (2) of the Income Tax Act, specifying the issues for selection of their case for assessment. Assessing officers, according to this section, issue notices to taxpayers if any discrepancy is found in reporting of income.

The assessee will be given 15 days to respond to the national e-assessment centre—which will soon be set up to facilitate electronic assessment in a centralised manner.

If the taxman requires further details, the centre will issue notice to the assessee requesting the same.

The taxman will prepare a draft assessment order by either accepting the returned income of the assessee or by modifying it. The assessee will, then, be given a chance to be heard through video telephony if the order is modified.

The national e-assessment centre, after completion of assessment, will transfer all case records to the assessing officer having jurisdiction over such case to:

• Impose penalties.
• Collect tax.
• Rectify mistakes.
• Initiate proposal seeking sanction for launch of prosecution and filing of complaint before court.

While the idea of e-assessments, is in principle, an outstanding one, the administrative systems and procedures need to be developed to ensure it doesn’t result in an uncalled-for injustice to the taxpayers, Nangia said.