Income Tax Assessment
Income Tax Assessment
Faceless Assessment becoming
nightmare for tax assesse!!!
Income tax assessment has always been a subject of concern for
every businessman, whether big or small.
Recently, the government has introduced new scheme of Faceless Income Tax
Assessment and there were quite a high
expectation of smooth conducting of Income tax faceless assessment, in a more
transparent manner and providing some respite to the tax assesses.
The intention behind faceless assessment was to eliminate the physical interaction
between the assesse and the tax officials, make use of technology in the entire
process and to reduce corruption and harassment of the honest tax payers.
Inspite of all the well intent behind the introduction of
faceless Income Tax Assessment, in reality, right from its
inception, the tax payers are facing lot of issues which has led to discontent
among the assesses.
Section 144B which deals with the entire scheme of new Faceless
Income Tax Assessment,
are often ignored by the tax officials while passing the assessment order.
Some of the issues which are being faced by the assessee during the entire process of Income Tax Assessment are as under:
a) No personal hearing is
often granted to the assessee
b) No adjournment has been
granted to the assessee
c) Parallel proceedings under
section 143(1)(a) and u/s 143(2) are conducted on same issues leading to
duplication
Let us discuss all the aforesaid issues one by one:
a) No personal hearing granted to the assesse
under new faceless assessment scheme.
Often, under the new scheme of faceless
assessment, the revenue passes the order
without granting a personal hearing to the assessee. This has led to increase in
litigation proceedings because the assessee challenges such orders as it is
against the principle of natural justice. The contention of the revenue in such
cases is that under the new scheme of faceless Income Tax Assessment, it is not
mandatory to grant personal hearing in all the cases.
As per revenue, taking into consideration section 144B(7)
read with CBDT circular dated 23/22/2020/31/03/2021, personal hearing can be
granted to the assessee in following cases:
- In response to the draft assessment order, the assessee has submitted written submission; and
- The assessee has requested for personal hearing
disputing the facts underlying the proposed additions or modifications in
the draft assessment order.
- Also, personal hearing request may be approved by the Director General
or Chief Commissioner of Regional faceless assessment Centre in case he is
satisfied that such request is covered under circumstances as laid down by
the Principal Chief Commissioner with the approval of CBDT..
Considering the above, the revenue has concluded that
power to grant personal hearing is not mandatory and is discretionary.
However, Delhi High Court in its recent ruling in case of
Bharat Aluminium Company Ltd. vs. Union of India & Ors. [WP(C)
14528/2021] has categorically held
that the power of personal hearing is not discretionary and it shall be granted
to every assessee if an assessee has asked for it and irrespective of the facts whether
the issue involved is question of fact or question of law.
b) No adjournment has been granted to the
assessee
Another issue which is faced quite often by the assessee under new Income
Tax Assessment scheme is that request for adjournment of the assessee is not
followed by the revenue. Many a times, assesse files an adjournment letter
seeking 15 days of adjournment for some reasons or the other and revenue send
them new notice even when the period of 15 days sought in the adjournment
letter has not expired. This is quite frustrating for the assessee and is
against the principle of natural justice.
c) Parallel proceedings under section 143(1)(a)
and u/s 143(2) are conducted on same issues leading to duplication
Another issue which has been witnessed under the new Income Tax Faceless
assessment scheme is that on same issues, notice u/s 143(1)(a)/ 143(1) is
issued on which already scrutiny assessment proceedings u/s 143(2) are going
on. Also, often demand is also raised by making adjustment u/s 143(1). Further,
in such cases, even option of online rectification is not provided to the
asseseee and they have to approach jurisdictional AO for filing manual
rectification request. This all process is quite cumbersome and frustrating for
the assessee.
From the foregoing, it may be seen that although the intention of
introduction of new Income Tax Assessment procedure was quite novel and it was a paradigm shift from existing
scheme of assessment, however, aforesaid factors has led to agony and
harassment of assessee.
The government and CBDT should bring about clarification/ amendment in
the faceless Income Tax
Assessment Scheme
in order to address aforesaid issues as well as other issues being faced by the
assessee otherwise the entire purpose of new faceless assessment scheme will be
defeated.
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