Guide To E-Assessment Under Income-tax Act, 1961

What is e-assessment or online assessment under the Income-tax Act, 1961

The Finance Bill 2018 has introduced a new scheme for scrutiny assessment to improve effectiveness of tax administration. The is called the e-assessment or online assessment.

Section 143(3) of the I-T Act empowers the Assessing Officer to make an assessment of total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment.

The e-assessment or online assessment scheme is designed to make assessments so as to impart greater transparency and accountability.

This will be achieved by eliminating the interface between the Assessing Officer and the assessee.

The e-assessment will also lead to optimal utilisation of resources and introduction of team-based assessment.

The scheme of e-assessment of income-tax returns was introduced on a pilot basis in 2017.

The scheme extended to 102 cities with the objective of reducing the interface between the department and the taxpayers.

Finance Minister Arun Jaitley stated that the tax department is now ready to roll out the e-assessment across the country.

This will transform the age-old assessment procedure of the income tax department and the manner in which they interact with taxpayers and other stakeholders.

Arun Jaitley explained that the Income-tax Act will be amended to notify the new scheme for e-assessment whereby the assessment will be done in electronic mode.

This process will almost eliminate person to person contact leading to greater efficiency and transparency, Jaitley said.

CBDT forms committee for e-assessment

The Central Board of Direct Taxes (CBDT) has constituted a high-level committee to prepare a quick roadmap for the implementation of the e-assessment scheme.

The CBDT, the policy- making body for the Income Tax Department, notified a nine- member committee.

The CBDT order explained that the committee is being constituted as the department is embarking upon the concept of a faceless and nameless online e-assessment procedure.

The e-assessment committee is headed by a Principal Chief Commissioner of Income-tax.

The Committee has to submit the report on implementation of e-assessment by February 28, 2018.

It is clear that the deadline of February end to the committee is an indication that the government and the CBDT want to usher in this new regime from the first half of 2018.

End of corruption in the Income-tax department

The CBDT has made it clear that the objection of the e-assessment scheme is to curb corruption by Income-tax Officers.

The initiative was launched to reduce visits by taxpayers to I-T offices and their interface with the taxman, thereby curbing corruption.

Deployment of manpower

The CBDT’s terms of reference to the committee are to propose the new deployment of manpower in view of the implementation of e-assessment; to propose modalities and stages of re- deployment of manpower from existing stations and to recommend the requirements of additional manpower and infrastructure, if any, in the light of this new initiative.

The committee will also recommend distribution of manpower between assessment units, investigation wing and DG Systems (the technical wing of the CBDT) in view of the new areas assigned to the investigation wings in matters related to Operation Clean Money, launched by the government to check black money post demonetisation.

The CBDT order said that there is an imperative need to re-deploy the available manpower in the light of the proposed e-assessment.


Paperless online assessment popular amongst taxpayers

A blueprint prepared by the CBDT states that the number of income tax payers opting for paperless assessment, under the pilot project, rose by 78 per cent over the last three years.

An official CBDT statement issued at the conclusion of the two-day ‘Rajaswa Gyan Sangam’ conference (national meeting of top tax officers of the country) had said the government wanted I-T assessing officers to be encouraged to maximise e-assessment in a phased manner and to ensure that work be completed online so that there is complete transparency.

Prime Minister Narendra Modi, who had inaugurated the conference, had also asked I-T employees to create an environment that instills confidence among honest taxpayers and uproots corruption.

A new link named ‘e-proceeding’ is available on the personal login page of every taxpayer on, the e-filing website.

The new regime of e-communication is voluntary. Taxpayers have to decide whether to conduct their dealing over the e-system or through the existing procedure of manual submissions of documents by visiting the tax office.

Taxpayers who opt for online assessment will get a confirmation by way of a text message and an email on their registered mobile number and email ID, indicating success.

The facility of e-assessment is available for all types of notices, questionnaires and letters issued under various sections of the I-T Act.

Advantages of jurisdiction-free assessment

A jurisdiction-free assessment implies that a taxpayer in Delhi, for instance, could be assessed by a tax officer randomly selected by the online system of the tax department and located in any other part of the country.

The biggest advantage of the e-assessment is that it will minimize corruption and discretion by the tax officers.

This will reduce the harassment for the taxpayers.

There are no disadvantages of the e-assessment procedure.

CBDT Instruction No. 01/2018 dated 12th February 2018

Instruction No. 0I/2018
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North Block, New Delhi, the 12th of February, 2018

Subject: Conduct of Assessment Proceedings in scrutiny cases electronically-regd.-

5ub-section (23C) of Section 2 of the Income-tax Act, 1961 (Act), applicable from 01.06.2016, provides that “hearing” includes communication of data and documents through electronic mode. Accordingly to facilitate conduct of assessment proceedings electronically, vide letter dated 23.06.2017, in file of even number, Board had issued a revised format of notice(s) under section 143(2) of the Act. Para 3 of these notice(s) provided that assessment proceedings in cases selected for scrutiny would be conducted electronically in ‘E-Proceeding’ facility through assessee’s account in E-filing website of Income-tax Department.

2. In accordance with the procedure outlined in revised 143(2) notice(s) for conduct of assessment proceedings electronically, it is hereby directed that except for search related assessments, proceedings in other pending scrutiny assessment cases shall be conducted only through the ‘E-Proceeding’ functionality in ITBA/E-filing. However, in cases where the concerned assessee objects to conduct of assessment proceedings electronically through the ‘E- Proceeding’ facility, such cases, for the time-being, may be kept on hold.

3. Further, considering the situation that some of the stations have limited bandwidth, being VSAT stations and stations with limited capacity where bandwidth is in the process of being upgraded, it has been decided that till 31.03.2018, such stations, in accordance with target stipulated in Centra! Action Plan for financial year 2017-18, may undertake and complete only ten percent scrutiny cases (which are getting barred by limitation on 31.12.2018) having the potential to effect recovery during the current year itself. The list of such stations shall be specified by the Pr. DGIT(Systems). Accordingly, at these stations, till 31.03.2018, the assessment proceedings in cases to be completed as per Central Action Plan target, may be conducted manually if e-assessment is not possible. It is reiterated that at other stations covered under para 2 above, subject to exceptions mentioned therein, the assessments would be conducted electronically only.

4. Some of the important procedural aspects while conducting assessment proceedings through ‘E-Proceeding’ are as under:

4.1 Enquiry before assessment in electronic mode: For enquiries before assessment in terms of section 142(l)(ii) of the Act, notice shall be issued electronically and delivered upon the assessee in his ‘E-Filing’ account. While filing the response electronically in compliance with notice under section 142(l)(ii) of the Act, the concerned assessee shall verify it in the manner prescribed under Rule 14 of Income-tax Rules, 1962.

4.2 Use of digital signature by Assessing Officer: All departmental orders/communications /notices being issued to the assessee through the ‘e-Proceeding’ facility are to be signed digitally by the Assessing Officer.

4.3 Time for compliance: Online submissions may be filed till the office hours on the date stipulated for compliance.

4.4 Availability of facility for electronic submission of documents in time barring situation or where case has been finally heard by the Assessing Officer: The facility for electronic submission of documents through ‘E- Proceeding’ shall be automatically closed seven days before the time barring date. In other situations, upon completion of proceedings, before passing the final order, concerned Assessing Officer, on his volition, shall close the e-submission facility after mentioning in electronic order sheet that ‘hearing has been concluded’. However, if required, in exceptional circumstances, the concerned Assessing Officer may enable further filing of submissions electronically under intimation to the Range Head in ITBA.

4.5 In assessment proceedings being carried out through the ‘E-Proceeding’ facility, a particular proceeding may take place manually in following situation(s):

i. where manual books of accounts or original documents have to be examined;

ii. where Assessing Officer invokes provisions of section 131 of the Act or a notice is issued for carrying out third party enquiries/investigations;

iii. where examination of witness is required to be made by the concerned assessee or the Department;

iv. where a show-cause notice contemplating any adverse view is issued by the Assessing Officer and assessee requests for personal hearing to explain the matter.

4.6 Maintenance of ‘Record’ in the context of ‘E-Proceeding’: In cases being assessed through ‘E-Proceeding’, from now on, as far as possible, case-records as well as note sheet of proceedings shall be maintained electronically.

5. This instruction may be brought to the notice of ail concerned for immediate compliance.

6. Hindi version to follow.

(Rohit Garg) Director (ITA.II), CBDT

(F.No. 225/1572017-ITA.II)

Copy to:-
1. PS to FM/OSD to FM/PS to MoS(F)/OSD to MoS(F)
2. PS to Secretary (Revenue)
3. Chairman, CBDT & All Members, CBDT
4. All Pr.CCsIT/ Pr.DsGIT
5. ITCC Section
6. O/o Pr. DGIT(Systems) for uploading on official website
7. Addl. CIT (Database Cell) for uploading on departmental website

See also: Government to roll out I-T e-assessment, cut person-to-person contact