The government of India along with the Finance Ministry and Income Tax Department has already introduced the new E-Assessment Scheme in order to provide greater transparency, efficiency and accountability in the whole assessment process prescribed in the Income Tax Act, 1961. With the introduction of this scheme, most of the processes and functions under the Act such as refund procedures, Income Tax Return Filing, assessment process, notice issuances etc. have become faceless and jurisdiction-less, as earlier these required a face to face interaction between the taxation authorities and the taxpayer. All this have been achieved because of the continuous efforts made by the department and the ministry to incorporate technology in the existing system for easing the burden of the taxpayers as well as the authorities.
Similar to the above processes, now the filing of the appeals to the Commissioner (Appeals), have been made available to the taxpayers in electronic mode. Now, the taxpayers can file appeals as per the new E-Appeal scheme introduced by the government in the recently presented Budget 2020. As per the scheme a taxpayer can file appeal through their registered e-filing portal accounts. However, for now the process after the appeal filing has not yet been made faceless or electronic.
The filing of appeals before Commissioner (Appeals) has already been enabled in an electronic mode. However, the first appeal process under the Commissioner (Appeals), which is one of the major functions/processes that are not yet in full electronic mode. A taxpayer can file appeal through his registered account on the e-filing portal. However, the process that follows after filing of appeal is neither electronic nor faceless. The E-Appeal scheme has been proposed by the government for inserting sub-section (6A) in the Section 250 of the Income Tax Act. It provides for the following-
- It empowers the Central Government to notify the taxpayers about the E-Appeal scheme for disposing appeals to impart transparency, efficiency and accountability at a greater level and extent.
- It eliminates the face to face interaction or interface between the appellate and the Commissioner (Appeals) during the whole technically feasible proceedings of appellate or appeals.
- The E-Appeal system has been introduced to enhance an appellate system with multiple or dynamic jurisdiction, where one or more Commissioner (Appeals), can dispose of the appeals.
- It optimizes the resource utilization with the help of economies of scale and the functional specialization.
It has been proposed for empowering the Central Government to give effect to the E-Appeal scheme with relevant sub-sections and clauses, through the Official Gazette notifications. These notifications are to be issued on or before 31st March, 2022 for directing all the related provisions of the act in relevance with the jurisdiction and procedure of the appeal disposal. These must not be applied or applied with relevant exceptions, adaptations or modifications as per specifications given in the notifications.
The E-Appeal scheme has been launched in line with the E-Assessment Scheme and is a reform initiated by the taxation department to eliminate the human interface and make the appeal system automated up to certain level.
Clause introduced in the Finance Bill, 2020 for amending E-Appeal:
To introduce the E-Appeal system and procedure in India a new Clause 95 has been prescribed in the Bill. It seeks to amend the section 250 of the Income Tax Act, 1961 that relates to procedure followed in during an appeal. The Clause 95 states that-
‘95. In section 250 of the Income Tax Act, 1961 after sub-section (6A), the following sub-sections shall be inserted, namely-
“(6B) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of disposal of appeal by Commissioner (Appeals), so as to impart greater efficiency, transparency and accountability by—
- Eliminating the interface between the Commissioner (Appeals) and the appellant in the course of appellate proceedings to the extent technologically feasible;
- Optimizing utilization of the resources through economies of scale and functional specialization;
- Introducing an appellate system with dynamic jurisdiction in which appeal shall be disposed of by one or more Commissioner (Appeals).
(6C) The Central Government may, for the purposes of giving effect to the scheme made under sub-section (6B), by notification in the Official Gazette, direct that any of the provisions of this Act relating to jurisdiction and procedure for disposal of appeals by Commissioner (Appeals) shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification: Provided that no direction shall be issued after the 31st day of March, 2022.
(6D) every notification issued under sub-section (6B) and sub-section (6C) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.” ‘
This amendment to introduce the system of E-Appeals will take effect from the 1st of April, 2020.