CBDT kickstarts talks with field officials on technology enabled jurisdiction free tax assessment

The CBDT had constituted an internal working group earlier this year to prepare a roadmap for the proposal of a jurisdiction-free tax assessment system and e-scrutiny of taxpayers.
The CBDT had constituted an internal working group earlier this year to prepare a roadmap for the proposal of a jurisdiction-free tax assessment system and e-scrutiny of taxpayers.

Jurisdiction-free assessment: CBDT kickstarts talks with field officials – A jurisdiction-free assessment implies that a taxpayer in Delhi could be assessed by a tax officer randomly selected by the online system from other parts of the country

Aanchal Magazine

With an aim to rollout jurisdiction-free assessment for direct tax in the upcoming Union Budget for 2018-19, the Central Board of Direct Taxes (CBDT) on Wednesday kickstarted consultations with its field officials. In a meeting held on Wednesday, senior tax officials of Delhi region were asked to provide feedback and suggestions regarding the jurisdiction-free assessment to the CBDT within a week, two officials aware about the development said.

The shift to a jurisdiction-free assessment would require legislative changes and the suggestions received from the field officers would be incorporated in the Finance Bill, 2018, by the CBDT, the policy making body of the income tax department, the officials said.

A jurisdiction-free assessment implies that a taxpayer in Delhi could be assessed by a tax officer randomly selected by the online system of tax department who would be located in any other part of the country, say, Mumbai or Chennai. This measure is likely to minimise the scope for corruption and discretion by the tax officers and in turn, reduce the harassment for the taxpayers.

“Though the entire process will not be nameless, but it would definitely enable a more technology driven interaction between the tax department and the taxpayer, with the assessment case not being restricted to one official. The law needs to be changed to enable one common jurisdiction region for all taxpayers,” one official said.

Illustrating the process of jurisdiction-free assessment, the official said that if a taxpayer would be asked to furnish some details by one tax officer through the online portal, then the answers would be looked into by another tax officer. Then, the final order would be issued by another officer, thereby, adding multiple layers of scrutiny and removing the discretionary powers of one tax official. “One tax official won’t have the complete powers over a taxpayer of his/her jurisdiction,” the official said.

Also, the CBDT is considering the proposal of functional specialisation, according to which a tax official will not handle all stages of assessment. The roles of tax officials are likely to be split in different functions of assessment, verification, tax demand, recovery and orders. The provision for functional specialisation may also include the specialisation of a tax official relating to a particular industry. Citing an example, the official said that for tax demand relating to oil companies registered in Mumbai, the department may consult a tax officer based in Kolkata who would be an expert on tax cases related to oil industry.

At present, in the 18 tax regions under Principal Chief Commissioners of Income Tax (Pr CCIT), a tax officer in a tax jurisdiction handles the entire process for a taxpayer.

In September this year, Prime Minister Narendra Modi in his address to tax officers at Rajaswa Gyan Sangam, the annual tax conference of CBDT and Central Board of Excise and Customs (CBEC), had emphasised on the importance of minimal human interface in the tax administration’s dealings. He had said that a push should be given to “e-assessment” and anonymity of proceedings using technology, so that vested interests do not impede the due course of law.

The CBDT had constituted an internal working group earlier this year to prepare a roadmap for the proposal of a jurisdiction-free tax assessment system and e-scrutiny of taxpayers. The group had then submitted its report in June that has been under active consideration of the department since then.

The government is already relooking at the direct tax law. Last week, the government had announced constitution of a six-member task force, headed by CBDT Member (Legislation) Arbind Modi, to draft an appropriate direct tax legislation keeping in view the direct tax system prevalent in various countries, the international practices and the economic needs of the country.

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