What is Honoring the Honest?

It is a new platform for transparent taxation introduced on 13th august 2020. Under this Government of India has specified three major heads which are

  • Faceless Assessment
  • Faceless Appeals and
  • Taxpayers’ Charter

What is Faceless Assessment?

As the name suggests faceless assessment is an initiative to make the complete income tax assessment process online. The new assessment process is an era of trust and transparency in tax.

The process is
  • Seamless
  • Online
  • More accountable
  • Easier compliances
  • No human interaction
  • Independent of any physical interface
  • Not restricted by the territorial boundaries
  • Faster and time based disposal of cases
  • Technology based cases selection and allotment
  • Improved quality assessment
  • Assured functional specialization
  • Time and cost saving as it does not involves office visits
  • No local or field officers to be involved in the assessment

Apart from the two exceptions listed below any assessment, done outside the norms or ambit of faceless assessment shall be considered as invalid.

What are the exceptions to the Faceless Assessment Scheme,2019?

The scheme shall not apply in following two scenarios:

  • When assessment order is required to be passed for cases assigned to Central Charges.
  • Where assessment order is required to be passed for cases assigned to International tax Charges.

Which is the governing statute for Faceless Assessment?

All cases under the Faceless assessment scheme shall be passed by the National e-Assessment center under faceless Assessment Scheme, 2019.

The exceptional cases as mentioned above will not be governed by this act or nodal agency.

What is Faceless Appeal?

Taxpayers can now file an appeal to the Income Tax Officer online. There is no requirement to

  • Physically visit office
  • Contact your jurisdictional ward or circle
  • Know your assessing officer etc

Also, the faceless appeal mechanism will ensure

  • Fair, team based and reviewed results
  • Random allotment of cases to the officials
  • Online or electronic response to the notices
  • Secrecy to the identify of the parties involved
  • Notices to be issued centrally with DIN (Document Identification Number)

When will the Faceless Appeal Scheme be implemented?

It will be implemented from 25th september 2020.

Are there any exceptions to the Faceless Appeal Scheme?

The few exceptions to the scheme are the matters involving

  • Serious fraud or tax evasion
  • International taxation charges
  • Sensitive & search matters
  • Benami property and
  • Black money transactions

What is a Taxpayer's Charter?

Taxpayer’s charter released by the CBDT on 13th August 2020 lays down

  • Commitment by the Income Tax Department to the taxpayers of the country
  • Expectations which should normally be fulfilled by the taxpayer

This is a step taken to strengthen the trust, transparency and relationship between taxpayers and department.

What are the commitments listed for the department in the Taxpayers’ Charter?

The department should give

  • Fair, Courteous, and Reasonable Treatment to the taxpayers
  • Believe taxpayer to be honest prima facie
  • Conduct impartial assessment and appeal
  • Give complete and true information
  • Disburse assessments timely
  • Collect only actual tax dues
  • Not intrude taxpayer’s privacy
  • Maintain confidentiality
  • Fix accountability
  • Etc

What are the responsibilities casted on the taxpayer in the Taxpayer’s Charter?

Following set of responsibilities have been entrusted in a taxpayer as per the new Income Tax Charter released

  • To be compliant and honest
  • Be aware
  • Maintain accurate records
  • Know what your representative reports
  • Make timely responses and
  • Clear your dues in timely manner

Frequently Asked Questions

Q- What was the need to bring a Transparent Taxation Scheme?

Ans. To stop bureaucracy, bring efficiency, timely redressal and increase compliances were some of the main reasons for introducing Transparent Taxation or Honoring the Honest.

Q- Can I know the assessing officer who is doing my assessment?

Ans. No, under the new faceless assessment scheme you can’t know which tax officer or tax officer operating from which location has been assigned to your case.

Q- Am I required to visit the department office if an Income Tax Notice is served?

Ans. No, as per the new changes the notice will be issued online having a DIN. You can reply to the Income Tax Notices online either yourself or through your authorized representative.

CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.