August 14 2020

India Launches Transparent Taxation Platform

Source: IBFD Tax Research Platform News

With a clear agenda to build trust between the taxpayers and the administration, the Prime Minister has launched the "Transparent Taxation" platform to honour honest taxpayers amid the COVID-19 pandemic. The said platform focuses on major reforms such as faceless assessment, faceless appeal and the Taxpayers' Charter.

Faceless assessment and faceless appeal

The faceless assessment and faceless appeal schemes aim to simplify the assessment and appeal process, ensure anonymity of taxpayers and minimize direct contact between taxpayers and income tax officers.

In this regard, the Central Board of Direct Taxes issued an order under section 119 of the Income Tax Act 1961 dated 13 August 2020 to support various e-governance initiatives, instructing that all assessment orders from now on be passed by the National e-Assessment Centre through the Faceless Assessment Scheme 2019, except for:

  • assessment orders in cases assigned to Central Charges; and
  • assessment orders in cases assigned to International Tax Charges.

The cases taken up for faceless assessment would include a mix of returns filed by individuals and businesses (micro, small and medium-sized enterprises, as well as large companies) and would be determined based on risk parameters and mismatches by a central computer. The National e-Assessment Centre would then allocate the cases to assessment units through an automated allocation system to ensure taxpayer anonymity. Assessees should then respond to notices electronically to the National e-Assessment Centre.

Taxpayers' Charter

Taxpayers are assured of fair, courteous and rational behaviour with the introduction of the Taxpayers' Charter 2020, which lists the Income Tax Department's commitments to taxpayers, including treating taxpayers with honesty, providing mechanisms for appeal and review, providing complete information, and reducing the cost of compliance, among other things, as well as the department's expectations from taxpayers.

The faceless assessment and the Taxpayers' Charter are effective from 13 August 2020, while the faceless appeal will be available across the country from 25 September 2020 onwards.