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 Notification No. 49/2020 CENTRAL BOARD OF DIRECT TAXES

Income Tax department may become more tech friendly from FY20
February, 04th 2019

Over the past few years, the Income Tax Department has become more accessible in terms of online information and processes. In the interim Budget presented on Friday, finance minister Piyush Goyal proposed to take the efforts forward and announced steps to make the department more technology-driven.

Taking forward the department’s online services and processes, the budget proposed to make filing of returns, assessment and refunds more friendly, where all tax returns filed will be processed in 24 hours and the refund initiated simultaneously.

“Last year, 99.54% of the income-tax returns were accepted as they were filed. Our Government has now approved a path-breaking technology-intensive project to transform the Income tax Department into a more assessee-friendly one," said the finance minister in his Budget speech.

Preethi Khurana, editor at Cleartax.in, an online tax filing firm, welcomed the move as a positive development for all parties concerned but also raised questions about its implementation. “Online scrutiny of returns has been going on in select cities for a while and has been successful where the cases are straightforward. The challenge will be when the case is more complex requiring extensive submission of documents and explanation. Implementation will be the key," she said.

The push seems to be towards greater transparency and it is seen as a move that will reduce the perception of corruption associated with matters relating to the income tax department.

The government also envisages a back office manned by tax experts where the verification and assessment of returns selected for scrutiny will be done anonymously and there will be no interaction between taxpayers and tax officers.

The anonymity that the proposal aims to provide to the taxpayer as well as the tax officer will be at best one-sided. The tax officer who is doing the scrutiny will know who the assessee is once the documents come to him even if the case is moved out of the jurisdiction of the circle where the income tax returns were filed. Only the assessee won’t know who is scrutinising the returns.

There is also reservation on how practical a completely digital interaction is likely to be. While the main concern seems to be about electronically submitting all the documents that may be required to resolve a complex case, the other is how effectively the assessee will be able to present her side of the case and how well the officers understand all the nuances without physical interaction. Experts said the department seem to veer towards a blend of digital and physical interface.

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