CBDT to taxpayers: Complete 30% faceless assessments by end-June

The Central Board of Direct Taxes (CBDT) has asked the faceless assessment units to make provisions for completion of assessments in a systematic and time-bound manner. It also directed tax officials to keep reassessments, penalty proceedings, and refund matters on ‘priority’ in the first half of the current fiscal year (2022-23).

In a recent action plan floated by the apex decision-making body in matters of income-tax (I-T), it said at least 30 per cent of the faceless assessments and penalty proceedings should be disposed of by end-June. The time limit for their completion expires on September 30. 

Faceless assessment units identify issues, seek information, and analyse material to conduct assessment.

The CBDT’s recent directive is in line with certain modifications to the I-T business application expected to be functional from end-May, said a tax official.

These are technical changes that will enable the system to address discrepancies arising out of conducting assessments, particularly regional ones.

For instance, the upgraded system will address some regional barriers the department had faced during faceless assessment. The new modification perhaps could enable cases to be in the same states, albeit different cities.

The changes followed concerns raised by taxpayers over anomalies since the new regime was introduced in 2020. Some even took the legal route against the scheme. Even as the new regime aimed at quicker resolution, many are still facing delays and inconvenience.

Of the nearly 60,000 cases identified for faceless assessment in the first phase, final orders have been passed in more than 24,000. Matters pending will be dealt with by the modified systems.

“Most cases asked to be disposed of by September are of last year’s. A new or a next cycle of scrutiny under faceless has not been run yet,” said another official.

The exercise is part of the faceless tax assessment system introduced in 2020 to eliminate the interface between an assessing officer and taxpayer in a bid to boost transparency in the tax administration. 

At present, international taxation, central charges (dealing with searches, black money, information sharing), and tax deducted at source (TDS)-related matters are outside the purview of the faceless scheme.

Meanwhile, in reassessment matters, the CBDT has asked for all documents to be uploaded, so that penalty proceedings are initiated timely.

It had also set a May 15 deadline for sharing information sought by law enforcement agencies, particularly the Central Bureau of Investigation, Enforcement Directorate, Financial Intelligence Unit-India, and the Serious Fraud Investigation Office.

“The tax department was directed to share information where requests are pending on and after March 31,” said the official quoted earlier. 

On matters related to TDS, it has asked the relevant TDS units to examine the top 30 cases of short payment by end-June and pass orders in cases where TDS survey had been conducted up to March 31.

The action plan also talks about the timely disposal of international taxation matters and draft order for reassessment.