EIRC - ICAI DECODING TAX REFORMS AS ANNOUNCED BY HON'BLE PM ON 13TH AUGUST 2020 - CA K.K.Chhaparia 20th August 2020 - EIRC-ICAI
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DECODING TAX REFORMS
AS ANNOUNCED BY
HON’BLE PM ON
13 TH AUGUST 2020
EIRC - ICAI
CA K.K.Chhaparia
20th August 2020TAX REFORMS ANNOUNCED BY HON’BLE
PM ON 13.08.2020
Prime Minister launched the platform for “Transparent
Taxation – Honoring the Honest” via videoconferencing
on 13 th August 2020
Key Announcements in the PM Speech
Taxpayers’ Charter
Faceless Assessments to be made effective from
13.08.2020
Faceless Appeals to be made effective from
25.09.2020
Extending Scope of SFT (notification to be issued)
20 August 2020 CA K.K.ChhapariaADMINISTRATIVE ORDERS TO GIVE
EFFECT TO PM ANNOUNCEMENTS
Statutory Orders to give effect of PM announcements
(All dated 13.08.2020)
SO 2745/2746 – Modification in Faceless Assessment Scheme
SO 2755 – PCIT merger order (for residual officers)
SO 2754 – CCIT merger order (for residual officers)
SO 2756 – New jurisdiction of NeAC officers
SO 2757/2758 -New jurisdiction of ReAC officers
Order u/s 119 dt 13.08.20 -Power of survey u/s 133A
Order u/s 119 dt 13.08.20 – All orders under Faceless Assessment
20 August 2020 CA K.K.ChhapariaKOLKATA I.T. DEPARTMENT CHANGES
Kolkata Restructuring (PCIT)
Presently we have 17 PCIT – In future 7 PCIT
Thus remaining are PCIT 1&2(Ayakar), 5(Poorva), 8(Rafi Ahmed- now BV), 9(Dakshin),
13(GP) & 18(B.Villa)
PCIT 1(Ayakar) -Charge of PCIT 1, 3 & 14
PCIT 2(Ayakar) –Charge of PCIT 2
PCIT 5(Poorva) – Charge of PCIT 5 & 12
PCIT 8(Rafi Ahmed now B’Villa) – Charge of PCIT 8 & 11 – So no CIT office in Rafi
Ahmed – MR will have TDS and Exemption wing, and SC
PCIT 9(Dakhinapan) –Charge of PCIT 9 & 10
PCIT 13(GP) – Charge of PCIT 13, 15 & 16
PCIT 18(B’Villa) – Charge of PCIT 18 & 21
PCIT Asansol, Burdwan etc – PCIT Burdwan
PCIT Siliguri
Kolkata Restructuring (CCIT)
CCIT Kolkata 1 – PCIT 1,5,8,18 and Asansol
CCIT Kolkata 2 – PCIT 2,9,13 and Siliguri
20 August 2020 CA K.K.Chhaparia20 August 2020 CA K.K.Chhaparia
NO POWER OF ASSESSING OFFICER TO
CONDUCT INCOME TAX SURVEY
Order u/s 119 dated 13.08.2020
Income Tax Survey can only be carried out by DGIT (Inv) for investigation
wing and Pr. CCIT/CCIT(TDS) for TDS charges henceforth
Implications – hencefor th Sur vey operations shall normally be
done for serious tax evasions.
Section 133A(2A) inser ted from 01 .10.2014
Power of TDS Officers in case of Survey had been restricted
In case of TDS Surveys, the TDS officers have been empowered to restrict
their scope to verify TDS/TCS provisions.
In terms of Proviso below section 133A(3), no power to make inventory
of stock, cash or other valuables or impound books of accounts etc.
20 August 2020 CA K.K.Chhaparia20 August 2020 CA K.K.Chhaparia
I.T.DEPARTMENT WATCHING YOU THROUGH SFT
SFT (Specified Financial Transaciton) is a repor t filed by
‘specified persons’ under S.285BA of I.T.Act, which records
transactions exceeding threshold limit, including investments
and expenditures done by taxpayers in a FY.
Section 285BB introduced by FA 2020 w.e.f 01 .06.20
Income Tax Department shall upload SFT transactions in assessee’s
registered account
In July 2020, the government had launched a revised Form
26AS which included high-value transactions from SFTs from
this assessment year, which would be now directly visible to
the taxpayer at the time of filing of Income-tax returns.
20 August 2020 CA K.K.ChhapariaINCOME TAX DEPARTMENT WATCHING
YOU THROUGH SFT (2)
List of existing SFT
Cash Deposits in savings account > Rs. 10 lacs in a FY
Cash deposit or withdrawal in current account > Rs. 50 Lacs
Purchases of bank drafts, pay orders etc in Cash >Rs 10 lacs
FD > Rs 10 lacs
Cash received for sale of goods or rendering of services >Rs. 2 Lakh
Credit card payments >Rs 1 lac (Cash) and Rs 10 lacs (other than Cash)
Receipt of share application money >Rs. 10 lacs
Receipt of money for subscription of bonds or debentures >Rs 10 lacs
Buy back of shares by a listed company >Rs. 10 lacs
Purchase/sale of immovable property, stamp duty value>Rs.30 lacs
Receipts towards Mutual Fund subscription >Rs 10 lacs
Sale of Foreign currency or Expenditure in Foreign currency >10 lacs
20 August 2020 CA K.K.ChhapariaINCOME TAX DEPARTMENT WATCHING YOU
THROUGH SFT (3)
Proposed transactions to be covered under SFT (as released
on 13.08.20)
Payment of educational fee/donation >Rs 1 lac p.a.
Payment of property tax >Rs 20,000 p.a
Electricity consumption >Rs 1 lakh p.a.
Purchase of jewellery, white goods, marbles, paintings, etc>Rs 1 lac
Payment to hotels >Rs 20,000
Domestic business class air travel/ foreign travel
Life insurance premium >Rs 50,000
Health insurance premium >Rs 20,000
Deposits/credits in current account> Rs 50 lacs
Deposits/ credits in non-current account >Rs 25 lacs
Share transactions/ demat accounts/ bank lockers
20 August 2020 CA K.K.ChhapariaIMPLICATIONS OF PROPOSED CHANGES IN SFT REPORTING For Income Tax Depar tment, these measures are aimed at watching consumption and investment pattern of assessee and matching with their return profile. The responsibility of capturing the data and informing to Income Tax Depar tment has been vested to the Vendor of goods and ser vices who is supposed to have necessar y infrastructure to capture the information. 20 August 2020 CA K.K.Chhaparia
20 August 2020 CA K.K.Chhaparia
FACELESS ASSESSMENT IN INDIA - EVOLUTION
2015 – Introduction of e-proceedings on pilot basis in New
Delhi and Mumbai
2017- E-proceedings scheme extended to other cities
•Option provided to taxpayers to opt for such proceedings
2018 - Formal system of e-assessment announced in
Budget 2018
•E-proceedings made mandatory for all taxpayers – (with
certain exceptions)
2019 - E- Assessment Scheme Notified on 07.10.2009
• Section 143(1A) to 143(1C) inserted
•Notices issued for AY 2018-19 and AY 2017-18 ( for
belated/revised return) – Around 58K Cases – 1st phase
2020 – Faceless Assessment Scheme Notified
20 August 2020 CA K.K.ChhapariaDEPARTMENT’S DATA OF E-ASSESSMENT
ORDERS
Number of cases selected under scrutiny was around 3%, then
1% , ay 17-18 it was .35% and now .10%
Fate of 58K Cases – till 16.08.2020
No reply submitted – 20000 cases
Draft Assessment order passed (DAO) – 10000 Cases
Out of 10000 cases for which draft assessment order (DAO) made, and sent
for Risk Management System (RMS), Cases selected for review is 3000 cases
– Presently pending in review 300 cases
Order passed favorably – 9600 cases
SCN Issued – 300 cases
20 August 2020 CA K.K.ChhapariaWHAT IS FACELESS ASSESSMENT ‘Faceless Assessment’ means the assessment proceedings conducted electronically in 'e-Proceeding' facility through assessee's registered account in designated por tal. Why Introduced Team Based Assessment Faceless Productive Utilization of Resources Productive Assessments 20 August 2020 CA K.K.Chhaparia
REGIME OF FACELESS ASSESSMENTS 20 August 2020 CA K.K.Chhaparia
FACELESS ASSESSMENT COMPLIANCE - STEPS Step 1 : Visiting the 'e-filing portal' in Income Tax site The assessee is required to visit the 'e-filing por tal' in the Income Tax site by visiting the link: https:! www.incometaxindiaefiling.gov.in/home The assessee is required to click on 'Login Here' tab under the tab 'Registered User‘ located on the right side of the screen 20 August 2020 CA K.K.Chhaparia
E-ASSESSMENT VS FACELESS
ASSESSMENT
E- Assessment (upto 12.08.20) Faceless Assessment (From 13.08.20)
The following categories of assessments The following categories of assessments
are kept outside the purview of E- are kept outside the purview of Faceless
Assessment: Assessment:
(a)Reassessment u/s. 147. (a) Search Assessment u/s 153A
(b)Search Assessment u/s 153A (b) Cases related to International Tax
(c) Best judgment assessment u/s. 144
(d) Cases related to International Tax
20 August 2020 CA K.K.ChhapariaFACELESS ASSESSMENT - SALIENT FEATURES Scrutiny S ele ction only throu gh automated sy stem using Data Analytics and Ar tificial Intelligence- Thus no manual involvement in selection for Scrutiny Abolition of terr itorial jurisdiction – Th us the AO s hall be situated in other cities and the assessee may not be able to know who is the AO. Central issuance of notic e with DIN – Thus, all notice can be issued by Income Tax Depar tment will have trail No physica l inter face , no ne ed to visit Inc ome Tax of fice – Th us, all re ply by assessee should be submitted electronically Team b ased a sse ssments and team based rev iew – Th us, Draf t assessment order in one city, review in another city and f inalization in third city 2/3rd of depa r tment’s manp ower for fac ele ss asse ssment s and balanc e for other functions 20 August 2020 CA K.K.Chhaparia
FACELESS ASSESSMENT SCHEME
COMMUNICATION
For collecting
information or
Among all documents or
the Units
evidence or any
other details for the
purposes of making
an assessment
All communications
shall be through the
National e-
assessment Centre
With any
other person With the
assessee
20 August 2020 CA K.K.ChhapariaE- ASSESSMENT CENTRES AND UNITS(1)
Centre Name Description
National e- Facilitate conduct of e-assessment proceedings in a centralised
Assessment manner, vested with jurisdiction to make assessment
Centre ('NeAC')
Regional e- Facilitate conduct of e-assessment proceedings, vested with the
assessment jurisdiction to make assessment
Centres ('ReAC')
Assessment To perform the function of making assessment which includes
Units (AU) identification of material points/issues in the ITR, seeking
information/ clarification on such points, analysis of material
furnished by Assessee and making of draft order. Each ReAC :
• 1 PCIT
• 4 Addl. /Jt.CIT,
• 4 DCIT/ACIT
• 20 ITO
20 August 2020 CA K.K.ChhapariaE- ASSESSMENT CENTRES AND UNITS (2)
Centre Name Description
Review Units To review the draft assessment order i.e. to check whether the relevant facts,
(RU) legal points & judicial pronouncements etc. have been properly incorporated
in the DAO. Each Review units will have :
• 1 PCIT
• 3 Addl. /Jt. CIT.
• 6 DCIT/ACIT
• 9 ITO
Verification To perform function of verification including enquiry, cross verification,
Units (VU) examination of b/a, recording of statement, witness etc. Each VU
• 1 PCIT
• 4 Addl. /Jt.CIT,
• 4 DCIT/ACIT
• 20 ITO
Technical To provide technical assistance which includes assistance/ advice on legal,
Units (TU) accounting , forensic, valuation , transfer pricing etc. Each TU
• 1 PCIT
• 3 Addl. /Jt.CIT
• 6 DCIT/ACIT
• 9 ITO
20 August 2020 CA K.K.ChhapariaREGIONAL E-ASSESSMENT CENTRES (ReAC)
ASSESSMENT UNITS - HEADED BY PCCIT
Each
Each PCIT
Addl /Jt. CIT
4 1 5
Addl /Jt. CIT DCIT/ACIT ITO
20 August 2020 CA K.K.ChhapariaREGIONAL E-ASSESSMENT CENTRES (ReAC)
VERIFICATION UNITS - HEADED BY PCCIT
Each
Each PCIT
Addl /Jt. CIT
4 1 5
Addl /Jt. CIT DCIT/ACIT ITO
20 August 2020 CA K.K.ChhapariaREGIONAL E-ASSESSMENT CENTRES (ReAC)
REVIEW UNITS - HEADED BY PCCIT
Each
Each PCIT
Addl /Jt. CIT
3 2 3
Addl /Jt. CIT DCIT/ACIT ITO
20 August 2020 CA K.K.ChhapariaREGIONAL E-ASSESSMENT CENTRES (ReAC)
TECHNICAL UNITS - HEADED BY PCCIT
Each
Each PCIT
Addl /Jt. CIT
3 2 3
Addl /Jt. CIT DCIT/ACIT ITO
20 August 2020 CA K.K.ChhapariaFUNCTIONS OF THE FIELD OFFICERS (1)
1/3 rd of Depar tment’s strength - will per form the following functions
in faceless manner to the extent possible:-
Taxpayer outreach and taxpayer education
Rectification proceedings
Grievance handling.
Demand Management, Collection and Recovery of taxes.
Statutory powers under section 263 / 264 of the Act
Prosecution and compounding proceedings
Custody and management of Case records.
Audit functions including handling matters pertaining to Revenue and
Internal Audit and taking remedial actions
Judicial functions including giving effect to appellate orders of CIT(A), ITAT,
HC, SC, Settlement commission; filing of appeal wherever considered
necessary; defending writ petitions; recommendation of SLPs etc.
20 August 2020 CA K.K.ChhapariaDIVERSION OF MANPOWER TO FACELESS
ASSESSMENT CHARGES
Particulars Faceless Residual Jurisdiction
Assessment
Charges
CCIT 30 32
PCIT 154 96
Addl/Joint CIT 565 252
DCIT/ACIT 645 261
ITOs and attendant staff 2830 1274
Total 4224 1915
20 August 2020 CA K.K.Chhaparia20 August 2020 CA K.K.Chhaparia
TAXPAYERS' CHARTER
Finance Minister on 01 .02.2020 in budget speech explained the
requirem ent of giv ing statutor y force to Taxpayer s’ Char ter and relevant
extracts of the speech reads as under:
“ Any tax system requires trust between taxpayers and the administration. This
will be possible only when taxpayer's rights are clearly enumerated…”
Subsequently Finance Act, 2020 inserted section 119A , with ef fect from
01-04-2020, to empower CBDT to adopt and declare a Taxpayer's Charter.
13th August 2020, Taxpayer’s Charter released by Hon’ble PM
Existing Citizen's Charter (last revised on 29- 4-2014) had no statutor y
backing
Though the Taxpayers’ Charte r in the present form is too generic in nature,
but the intentions are worth praising. Many cou ntries have already
impleme nted Taxpayer's Charter inc luding Australia, Canada, Malta, New
Zealand, Kenya , etc. In cou ntr y like UK, Taxpayer Char ter has statutor y
backing.
20 August 2020 CA K.K.ChhapariaTAXPAYERS’ RIGHT
– DEPARTMENT OBLIGATIONS
Taxpayer’s expectations Department’s Obligations
Provide fair, courteous, The Department shall provide prompt, courteous, and
and reasonable treatment professional assistance in all dealings with the taxpayer.
Treat taxpayer as honest The Department shall treat every taxpayer as honest
unless there is a reason to believe otherwise.
Provide mechanism for The Department shall provide fair and impartial appeal
appeal and review and review mechanism.
Provide complete and The Department shall provide accurate information for
accurate information fulfilling compliance.
Provide timely decisions The Department shall take decision in every income-tax
proceeding within the time prescribed under law.
20 August 2020 CA K.K.ChhapariaTAXPAYERS’ RIGHT
– DEPARTMENT OBLIGATIONS
Taxpayer’s expectations Department’s Obligations
Provide mechanism to The Department shall provide mechanism for lodging a
lodge complaint complaint and prompt disposal thereof.
Provide a fair & just The Department shall provide a fair and impartial system
system and resolve the tax issues in a time-bound manner
obligations under the law.
Publish service The Department shall publish standards for service delivery
standards and report in a periodic manner
periodically
Reduce cost of The Department shall duly take into account the cost of
compliance compliance when administering tax legislation.
The Department shall allow every taxpayer to choose an
authorized representative of his choice.
20 August 2020 CA K.K.ChhapariaTAXPAYERS’ RIGHT
– DEPARTMENT OBLIGATIONS
Taxpayer’s expectations Department’s Obligations
Collect the correct amount The Department shall collect only the amount due as per
of tax the law.
Respect privacy of The Department will follow due process of law and be no
taxpayer more intrusive than necessary in any inquiry, examination,
or enforcement action.
Maintain confidentiality The Department shall not disclose any information
Hold its authorities The Department shall hold its authorities accountable for
accountable their actions.
Enable representative of The Department shall allow every taxpayer to choose an
choice authorized representative of his choice.
20 August 2020 CA K.K.ChhapariaINCOME TAX DEPARTMENT EXPECTATION
Tax Payer’s Obligations Department’s expectations
Be honest and Taxpayer is expected to honestly disclose full information
compliant and fulfil his compliance obligations.
Be informed Taxpayer is expected to be aware of his compliance
obligations under tax law and seek help of department if
needed.
Keep accurate records Taxpayer is expected to keep accurate records required as
per law.
Know what the Taxpayer is expected to know what information and
representative does on submissions are made by his authorised representative.
his behalf
Respond in time Taxpayer is expected to make submissions as per tax law in
timely manner.
Pay in time Taxpayer is expected to pay amount due as per law in a
timely manner.
20 August 2020 CA K.K.Chhaparia20 August 2020 CA K.K.Chhaparia
FACELESS APPEALS
FM announced Faceless Tax Appeals in lines of Faceless Assessment
In Section 250, new Ss (6B), (6C) and (6D) were inser ted by FA 2020
As announced by Hon’ble PM, CBDT will launch faceless appeals
beginning 25 th September 2020
Appeals will be allotted at random to of ficer s, taxpayer s will not need
to visit of fices or meet any of ficials, the identities of the of ficer s
deciding the appeal will remain unk nown, t he appellate decision will be
team-based and reviewed.
Exceptions to Faceless Appeal : Cases relating to
Appeal includes, serious frauds, major tax evasio n, sensitive and
search matter s.
International Taxation and
Black Money Act & Benami Proper ty.
20 August 2020 CA K.K.Chhaparia20 August 2020 CA K.K.Chhaparia
FACELESS PENALT Y Similar to Faceless Assessments AU to initiate Penalty through NeAC 20 August 2020 CA K.K.Chhaparia
CA K.K.Chhaparia
8, Camac Street, Suit 502,
Kolkata - 700017
kkc@chhapariaassociates.com
9830044407
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