Centre likely to allow billionaire taxpayers to exit faceless assessment scheme: Report

The Centre is mulling allowing taxpayers, who post earnings of Rs 200 crore or more, to opt-out of the Faceless Assessment Scheme (FAS) that seeks to eliminate the human interface between the taxpayer and the income tax department.

Such billionaire taxpayers are likely to be allowed to go for jurisdictional assessment, said a Business Standard report quoting an anonymous source. The modification to FAS is being considered to provide flexibility to the top rung of taxpayers, the report adds.

Under jurisdictional assessment, a taxpayer is assigned an Assessing Officer (AO), who conducts scrutiny of the returns of the taxpayer. The Income Tax department has divided taxpayers into various jurisdictions, based on their region. Any tax dispute of the taxpayer would be considered only in the respective jurisdiction.

In case there are discrepancies in the filing of the returns and the assessee gets a notice, then they will have to respond to their respective jurisdiction’s assessing officer.

The Centre rolled out FAS in 2019 to shift from jurisdictional assessment as tax officers, in some cases, were found to be harassing taxpayers. There also have been instances where the taxpayers and tax officers have reached a mutually beneficial agreement, leading to tax evasion.

On the other hand, under FAS, the taxpayer and the tax officer are usually not in the same city. Under the scheme, tax returns are allotted for scrutiny randomly to a team of IT officers in any city by a central electronic-based system. The scrutiny is reviewed by another team of IT officers selected randomly. This allows more transparency.

Meanwhile, the government is also likely to take a call on the feasibility of expert teams within the tax department handling international taxation and capital gains.

The report comes about two weeks after the income tax department notified three official email IDs for taxpayers to register grievances under the faceless or e-assessment scheme.

"In a move aimed to further improve taxpayer services in alignment with the Taxpayers' Charter, the Income Tax Department creates dedicated e-mail ids for registering grievances in respect of pending cases under the Faceless Scheme," said the department in a tweet.

The three email IDs set up for taxpayers to register grievances are — samadhan.faceless.assessment@incometax.gov.in; samadhan.faceless.penalty@incometax.gov.in; and samadhan.faceless.appeal@incometax.gov.in.