Mumbai, September 15, 2017

The project will cover 100 cities in the first phase of implementation

The assessment of taxpayers is set to become jurisdiction-free. Come October, the income tax (I-T) department will launch a pilot project of the new system in Mumbai and Delhi to identify the loopholes. The project will then cover 100 cities in the first phase of implementation.

The system envisages allocation of a particular taxpayer’s profile to any officer across the country via a special software. In the existing system, taxpayers are assessed in the specific region where they are based.

The move aims to curb corruption in the department along with harassment faced by the assessees. “This is a first-of-its-kind initiative. Under this, neither the assessee nor the tax officer would know the other’s identity,” said a senior I-T official close to the development.

The system would be equipped to deal with all kinds of tax-related matters, including filing of returns, scrutiny cases, and others, he added.

The system is expected to dissolve the main 18 tax regions in the country, which account for all direct tax collection.

Recently, Prime Minister Narendra Modi highlighted several defects in existing tax laws and directed the I-T department to build a new system for taxpayers.

In the new system, if the tax department launches scrutiny against a person in Delhi, the software will provide the related correspondence and generate a unique identification number. This number, or code, would be randomly assigned to an assessing officer (AO) based in say, Mumbai or Guwahati or anywhere else. The AO will not be able to identify the person against whom the scrutiny has been launched. The investigation will be pursued based on the case details and the relevant documents pertaining to the matter.

The new system would also do away with the AOs’ discretionary powers to call for additional documents, records, and most importantly, ask the taxpayer to appear in person.

Under the pilot project, the additional documents, if required, will be sought through the system, which will automatically send a request to the assessee for submission of the same.

The jurisdiction-free assessment system aims to minimise interaction between the taxpayer and the tax officer, ensuring a transparent and no-harassment culture. “The e-communication is expected increase voluntarily participation, and give more comfort to the assessee,” added the officer.

The first experiment would be done on scrutiny cases through an ‘e-proceeding’ system — an internet-based paperless communication system for tax dealings. The I-T department is working on similar modules.

[The Business Standard]