India Direct Tax – Changes & Impact

INTRODUCTION

– A new platform for simplying our tax system to being efficiency, transparency
and accountability named ‘Transparent Taxation – Honoring the Honest’.
The new platform includes tax reforms through the following reforms:

• Faceless Assessment

• Faceless Appeal and

• Taxpayer`s Charter.

- Faceless Assessment Scheme (“FAS”) along with Taxpayer’s Charters is

applicable from 13.08.2020 only whereas, the Faceless Appeals shall come into
force on 25.09.2020

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SUMMARY OF THE CHANGES
• E-Assessment Scheme, 2019 is now Faceless Assessment Scheme, 2019.

• Faceless assessment shall be done where assessee has filed a return or filed return in
a) response to a notice, b) income escaping assessment and c) scrutiny notice .
Scheme shall now also cover ‘Best Judgment Assessment’ u/s 144 of the Act

• Procedure of assessment has been changed. The National e-Assessment Centre

(“NeAC”) have been given concurrent jurisdiction and accordingly, it shall intimate the
assessee that assessment in his case shall be completed under the said Scheme

• Faceless Assessment, by NeAC would be carried out along with the coordination of (i)
assessment unit for drafting of assessment order,(ii) verification unit for further inquiry,
(iii) technical unit for technical assistance, (iv) review unit for reviewing the draft of
assessment order.The cases for Faceless assessment would be allocated through
automated random allocation system

• Hearing in person or through authorized representative before any income-tax authority

at the National / Regional e-assessment Centre or any other unit, shall not be allowed
except in special circumstances after necessary approvals. Personal hearing in special
circumstances would be provided through the Video Conference

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• It is pertinent to note that FAS as notified by Notification(s) dated 13.08.2020, does not
cover faceless proceedings for consequential penalty arising out of the additions made
to total income in assessment order passed under this Scheme.

• Search & Seizure: Faceless assessment scheme is not applicable to cases u/s 153 of
the Act. However, CBDT recognizes that powers of inspection of books, cash, stock
etc are very wide and instrusive.Therefore CBDT has withdrawn the powers from
jurisdictional tax authorities and confers it on Director of Investigation wing. It has
been clarified that the assessment orders in the cases assigned to Central Charges
and in cases assigned to International Tax Charges would also not be covered under
FAS.

• Dispute Resolution Panel: For approaching DRP, the National e-Assessment Centre
(‘NeAC’) will only pass a ‘draft’ order; thus giving an option to the taxpayer to approach
the DRP. Basis the current provisions, the DRP proceedings are not envisaged to
happen in a faceless manner

• Transfer Pricing Assessments: Under this scheme, the technical unit shall support
the assessment unit on transfer pricing assessments.

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TAXPAYER’S CHARTER
The taxpayer charter unveiled on 13th Aug’20, provides for rights of tax payers
and obligation of tax authorities:
• Providing fair, courteous and reasonable treatment while dealing with income
tax matters

• Treating the taxpayer to be honest taxpayer

• Provision of complete and accurate information to the taxpayer and also

completion of tax proceedings within timeframe

• Only correct dues to be collected as per law

• Protect and respect the privacy of taxpayer and maintain confidentiality of

information provided

• Hold the tax authorities accountable for their actions

• Ease of lodging complaints and resolution in a time bound manner

• Taxpayer can approach Principal Chief CIT in each zone for compliance of
this charter

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