“The faceless assessment system of the income tax department
has been a game-changer in the arena of direct taxation.
It has empowered taxpayer and has, as a foremost mechanism, altered the facets and perception of overall tax administration in India,” said a highly-placed source in the finance ministry.
Faceless assessment was launched on October 7, 2019. In the first phase, some 58,319 cases were assigned for the faceless assessment in an automated way randomly.
These cases were kept away from the geographical jurisdiction of the case, based on computer algorithms.
The sources said earlier, during assessment proceedings in scrutiny cases, taxpayers or their tax professionals were required to make multiple visits to the income tax office. There were allegations and some incidences of discretion and subjective approach, which often resulted in high-pitched assessments.
The sources said that now almost 99 per cent returns are e-filed. Out of more than 60 million returns filed annually, only about 300,000 returns come under scrutiny on the basis of select risk parameters.
Cases are centrally chosen for scrutiny using a computer-aided selection proccess.
Some cases under scrutiny are also selected manually on the basis of specified criteria. Old assessments can also be reopened if the assessing officer has sufficient reason to believe that some income has escaped assessment.
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