The government has taken steps in transforming its judicial system by going completely faceless and using e-proceedings. Faceless e-proceedings started off as a pilot-based email assessment, but has now gone completely faceless. Even the first appellate proceedings as well penalty proceedings have gone faceless with notices and orders being received on a daily basis. Further, the Govt. has also announced an e-filing portal of Income-tax Appellate Tribunal.
Faceless schemes and e-proceedings has been on the move since its inception, with the government rolling out various initiatives to improve ease of doing business. The faceless schemes are not just about e-proceedings… it is also ab\out the whole process of appellate proceedings, penalty proceedings and even regular cases. E-proceedings are electronic in nature and the procedures that are involved include filing of documents, submission and receipt of evidence. E-proceedings are used to give users access to the proceedings around them and they need not physically be present at a court room. A huge benefit of e-proceedings is that you can read all documents in real-time rather than having to wait for it to reach you by courier or post.
What is Faceless E-proceedings:
Faceless e-proceedings in Income Tax India is a system of conducting tax proceedings with taxpayers in a virtual, online environment, without any physical interface between the taxpayer and the tax authorities. This system was introduced by the Income Tax Department in India as a part of its e-governance initiatives to make tax assessments more transparent, efficient, and free from any biases.
Under this system, all communication between taxpayers and the tax department is done through electronic means, such as emails, video conferencing, or online chats. The entire process of tax assessment, from the issuance of notices to the final order, is conducted online, without any physical intervention.
The Faceless E-proceedings system is aimed at reducing the scope for corruption, improving efficiency, and providing better taxpayer services. It is a major step towards making the Indian tax system more transparent, accountable, and taxpayer-friendly.
Intention of Faceless Schemes and E-proceedings:
Originally, faceless schemes and e-proceedings were used as pilot-based strategies by the Govt. to get feedback on the working of such schemes. The pilot phase was completed within a year, resulting in full-fledged e-proceedings and appellate proceedings. Thereafter, there have been multiple announcements on an increase in automation aspects of papers processing across all income tax cases including admissions, replies and appeals thereby encouraging more companies to shift towards digital solutions for their everyday business already prevailing due diligence processes. The move is intended to make the process of appeal faceless. The Income Tax Appellate Tribunal (ITAT) and other appellate courts will not be served with paper mail and instead all notices, orders and judgments will be sent through electronic means. This will result in lower costs for government ex-chequer, reduce the travel expenses required at various venues while also reducing the time taken by litigants to reach these courts.
- Increased Efficiency: Faceless e-proceedings can help save time and resources by eliminating the need for physical meetings, which can be time-consuming and may require travel. This can help reduce the backlog of cases and improve the efficiency of the tax administration.
- Reduced corruption: The digital processing of Income Tax proceedings through faceless e-proceedings can help reduce the possibility of corruption by eliminating the need for face-to-face interaction between taxpayers and tax officials.
- Increased Transparency: The use of technology can increase the transparency of the Income Tax proceedings by reducing the possibility of errors or manipulation, which can help build trust between taxpayers and tax authorities
- Cost-effective: Faceless e-proceedings can also be cost-effective as they do not require the deployment of a large number of personnel and resources, which can help reduce the cost of tax administration.
- Technical Glitches: The use of technology in Income Tax proceedings may lead to technical glitches, such as network failure, which can delay the processing of cases and may require additional time to resolve.
- Limited interaction: Faceless e-proceedings can limit the interaction between taxpayers and tax authorities, which may reduce the scope for taxpayers to present their case and may increase the chances of errors in the assessment
- Data security concerns: The digital processing of Income Tax proceedings can also raise concerns about the security of personal data and sensitive financial information, which may be vulnerable to cyber threats
- Lack of personal touch: The use of faceless e-proceedings may also lead to a lack of personal touch, which can make the process appear more mechanical and may not be suitable for cases that require a more nuanced understanding.
At MAS, we assist our clients with various income tax compliances, including income tax assessments, ITR filings, tax advisory, TDS matters other related services by providing them adequate support and guidance from our end. If you have any questions or wish to know more about Faceless schemes and e-proceedings, kindly contact us.