Faceless assessment scheme may revert to physical mode for large taxpayers

The Income Tax Department has issued over 1.2 lakh tax orders under the faceless assessment scheme but now finds itself sitting on those orders as responses to notices sent electronically have not been coming.

Sources in the Central Board of Direct Taxes (CBDT) said that the trend is disturbing and this may push the I-T Department to switch to physical mode of operations that would involve issue of exparte orders against unresponsive taxpayers who may also face raids or physical scrutiny of documents by taxmen.

"This is not a situation that the department wants to be in after the start of faces assessment system but certain tax payers are pushing us into that direction," a source said.

Since its launch on October 7, 2019 and implementation of first phase, faceless assessment has provided for assessment of income tax in electronic mode, where "taxpayers need not see face-to-face any tax officer or visit an I-T office and need not run pillar-to-post on receiving income tax scrutiny assessment notice".

They also do not have to rush to a tax professional or accountant and can e-file assessment's reply on the income tax portal from the comfort of their home without  any hassle or visiting any tax officer.

The problem that I-T Department is facing under the faceless scheme is that several taxpayers are not providing their contact details in the form of valid e-mail ID for communication. This leaves the department in the dark if a certain query has to be generated on returns filed by the taxpayers.

As a follow-up action, in these cases, visits to taxpayers by tax officials becomes necessary.

Sources said that though the problem of communication under faceless scheme is being faced across the board involving different categories of taxpayers, the department has decided to focus only on certain large taxpayers where taxmen can come calling for physical verification of documents.

The department is also facing unique problem of taxpayers resorting to use of foul language in response to notices sent to them electronically and queries generated on certain transactions. To overcome this, the CBDT is examining  whether action could be taken against certain assesses under the provisions of the Information Technology Act.