PM: Tax System will be Made Seamless, Painless, Faceless

Modi Launches Taxpayer Charter; CBDT Restricts Power of Officers in surveys

Assuring taxpayers of fair, courteous and rational treatment by the income-tax authorities, Prime Minister Narendra Modi launched a platform for “Transparent Taxation – Honoring the Honest on 13 August 2020.”

Pushing forward his government’s tax reform measures, Modi urged taxpayers also to introspect and come forward to pay taxes promptly to support the effort to build an Atmanirbhar Bharat.

“The Income Tax Department will need to honour the dignity of a taxpayer and keep sensitivity in mind,” the Prime Minister said, adding that the ongoing reforms aim at making the tax system seamless, painless, faceless.

Alongside this platform, the government also came out with a Taxpayer Charter, which defines the rights and obligations of the tax-payers as well as the Department.

Commitments and obligations

The Charter lists 14 commitments by tax officials and six obligations of tax payers. The commitments include fair, courteous and reasonable treatment, treat taxpayer as honest, provide mechanism for appeal and review, provide complete and accurate information, provide timely decisions, and respect the privacy of the taxpayer.

The tax-payer’s obligations include: Be honest and compliant, disclose complete information, be informed about tax rules and compliance requirements and maintain accurate records and documentation.

Modi said the taxpayer should be assured that the Department will not have any suspicion without reasonable doubt. He acknowledged that the number of taxpayers has gone up by 2.5 crore in the last seven years. “This number could be big, but not when we consider a population of 130 crore. In fact, there are just 1.5-crore people effectively paying tax,” he said, while asking people to introspect and discuss how this can be improved. Acknowledging the efforts of the tax officials, Modi said that complaints have come down, as have litigations. “There is increased transparency, compliance and trust,” he said.

Faceless appeal

The government also said the faceless appeal facility will start from September 25. The Finance Ministry notified an amendment to the e-assessment scheme to provide the framework. Under this system, the National e-Assessment Centre will serve a notice on the assessee specifying the issues for selection of his case for assessment. The assessee will have 15 days to respond. The case will be assigned to an assessment unit in any one of the Regional E-assessment Centres through an automated allocation system. Further communication on requirement of any information will be routed through that Centre only.

Once the assessment is done, a draft order will be examined by the Centre in accordance with the risk management strategy specified by the Board. It may decide on finalising the assessment as per the draft order, and serve a copy of the order and notice for initiating penalty proceedings, if any, to the assessee. It can also serve a demand notice or provide the assessee an opportunity for modification or assign the draft order for review to another regional unit. Based on response from the assessee and peer review, the final order will be served on the assessee. If an assessee fails to respond to a notice, the Centre can take a call.

To emphasise the government’s commitment, and curb the discretion factor in deciding on searches of assessees, the Central Board of Direct Taxes made it clear that only officers of the Directorates of Investigation (Investigation Wing) and Commissionerates of TDS (Tax Deducted at Sources) will have the authority to conduct surveys.