The I-T returns proceeding is becoming completely faceless with the I-T Department launching a new mechanism to verify taxpayers' returns
A notification released by the finance ministry on Wednesday threw light on one of the major steps taken by the Income Tax Department, under the ministry, towards the income-tax proceedings.
The proceeding is becoming completely faceless with the I-T Department launching a new mechanism to verify taxpayers' returns.
A Central Verification Centre (CVC) has been set up by the department to carry out e-verification of the 'red-flagged' cases of income-tax returns.
The new facility will verify the income-tax returns of individuals as well as companies.
The system will red-flag returns filed by taxpayers on the basis of around 200 odd risk assessment parameters set by the department.
These cases will be taken up for e-verification by the taxman.
1. Faceless income-tax proceedings
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The Finance Ministry on Wednesday released a notification which highlights the new step taken by the Income Tax Department whereby the income-tax proceedings will become completely faceless
As per a new mechanism launched to verify taxpayers' returns, a Central Verification Centre has been set up by the department to carry out e-verification of the 'red-flagged' cases of income-tax returns
2. No human interaction
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Currently, while a large number of returns may have discrepancies, only about 0.5% of the total returns filed are picked up for random scrutiny.
The manual verification of all the returns, however, is not possible.
"Now with the new e-verification system, all the income-tax returns filed by taxpayers will be matched with the financial data available with the department, which it gets from various sources. If any discrepancy is found, the system-generated e-mail notices will be sent to taxpayers seeking responses. The entire process will be faceless without involving any human interaction," said a senior official privy to the developments
3. Elimination of manual verification
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The new system of online verification will have the system-generated questionnaires with multiple choice questions.
The replies of assessees would be in the machine-readable XML format, eliminating the need for manual reading of the responses
4. 'Within two years, scrutiny will be done electronically'
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The I-T department had been working on the plan to make the entire process of verification as well as scrutiny completely faceless.
While presenting the Budget on February 1, interim finance minister Piyush Goyal had said that within the next two years, almost all verification and assessment of returns selected for scrutiny will be done electronically through anonymised back office, manned by tax experts and officials, without any personal interface between taxpayers and tax officers
5. E-verification process
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The e-verification notices will be sent under section 133C of the Income-Tax Act, 1961.
The cases where the reply of the assessee is found to be satisfactory will be closed and wouldn't be pursued by the department.
The other cases where the reply is not satisfactory will be sent to the assessing officer for scrutiny, which is a long-drawn statutory process under section 143 of the I-T Act.
The CVC, located in Ghaziabad in the National Capital Region, will have powers to call for any information from banks or any other financial institution. It will be headed by an I-T commissioner.
The next step will be to make the scrutiny process fully automated and completely faceless where the assessee wouldn't know who is the assessing officer
6. Tightening screws
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All I-T returns will be matched with the financial data available with the department, which it gets from various sources. If any discrepancy is found, the system-generated e-mail notices will be sent to taxpayers seeking responses
