E-Assessment | Meaning | Process and Advantages of E-Assessment

Introduction to E-assessment:

E-assessment is an electronically conducted income tax assessment through the assessor’s/taxpayers registered account in the tax filing portal. It is a kind of e-proceeding. It was proposed by the Finance Minister of India to ease the process of assessment done manually till now. This scheme was introduced to carry out assessment procedure without any human interface between the taxpayer and the tax authorities. The e-assessment has to be made in respect of such territorial areas; or persons or class of persons; or incomes or class of incomes; or cases or class of cases as specified by the Board.

Organizational structure in E-assessment:   

The Central Board of Direct Taxes (CBDT) is going to set up some centers and units and also specify their jurisdiction for carrying out the process of E-assessment. These are:

  1. National e-Assessment Center (NeAC) – For centralized facilitating and conducting of the e-assessment.
  2. Regional e-Assessment Center (ReAC) – For facilitating and conducting the e-assessment under the jurisdictional region of the Principal Chief Commissioner. A total of 8 regional e-assessment units are to be made including:
  • Assessment units – The main functions of this unit is to identify all the points and any issues for determining any liability including refunds. To seek information and clarification on such identified points and issues. To analyze all the documents provided by the assessee and performing any functions as per requirements for the process of e-assessment.
  • Verification units – The main functions of this unit is to enquire, cross-verify, to examine the witnesses and the book of accounts, record any statements and to perform any function as may seem necessary for the e-assessment process.
  • Technical units – The main functions of this unit is to provide any technical assistance either legal or in accounting or on information technology. It also assists on the issues of valuation, management, data analysis, forensic and pricing transfers. It assists on any technical matters as may seem necessary for the e-assessment process.
  • Review units – The main functions of this unit is to review the drafted orders of the assessment which includes checking all the relevant documents and evidences brought on the records during assessment, checking the incorporation of relevancy of the points and facts and the law in the drafted order of assessment, checking consideration of judicial decisions in the order, checking the correctness of proposed modifications and other functions to carry out review as may seem necessary for the purpose of e-assessment process.

Advantages of having E-assessment process:

Having e-assessment tax system in India, have numerous benefits of its own. These include:

  1. It does not have any human interface.
  2. It is transparent and efficient at the same time.
  3. It provides an easy compliance to the taxpayers.
  4. The quality of the assessment is improved.
  5. It provides a systematic and specified verification procedure.
  6. It provides specialization in the function of the e-assessment process.
  7. It has focused approach and better monitoring than the manual tax assessment.
  8. It makes the e-assessment process more standardized.
  9. It is time saving and the disposal of cases in this does not take a lot of time or are expeditious.
  10. It provides for a quality management.

Procedure of E-assessment in India:

The process of e-assessment includes various steps and guidelines to be followed by the assessor. These are:

  1. The National e-Assessment Center (NeAC) serves a notice to the person under section 143(2) to specify the issue or subject selected for the assessment. The assessee has to file the response within fifteen days of receiving the notice.
  2. NeAC through automated allocation system then assigns the case to any specific ReAC assessment unit.
  3. After allocation of the case the assessment unit makes request to the NeAC for obtaining information or evidences or documents from the assessee or the concerned person, for conducting enquiry and verification carried out by the verification unit and for seeking any technical assistance from the technical unit.
  4. After getting the above mentioned request from the assessment unit, NeAC then issues a proper notice to the assessee for furnishing all the documents or evidences and information as required by the assessment unit.
  5. Then the assessment unit can make a request for verification or enquiry by the verification unit to the NeAC. Through an automated allocation system the NeAC has to allocate the verification unit to carry out the required verification and enquiry.
  6. Assessment unit can also request the NeAC for technical support from technical unit. Through an automated allocation system the NeAC then allocates any one of the ReAC technical unit to assist the assessment unit.
  7. The assessment taking in account all the information gathered and enquiry and verification done then, records in writing and drafts assessment order and sends a copy of such order to the NeAC. In the drafted assessment order the assessment unit can provide the details of the penalty proceedings if any to be initiated.
  8. The NeAC allocates the review unit to review the drafted assessment order. The review unit can send in any suggestions or modifications required.

If any such modifications are to be made then the NeAC sends back the drafted assessment order to the assessment unit for modifying it as per the requirement. The modified order is send to assessee for which he has to furnish a response.

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    Author: Anil Agrawal
    EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.