News | Tax

Faceless tax assessment system prone to errors, says Madras HC

The Madras High Court in a recent order has opined that the faceless tax-assessment system “can lead to erroneous assessment, if officers are not able to understand the transactions and statement of accounts of an assessee without a personal hearing”. 
The court, however, said electronic-assessment — introduced to curb cases of corruption and harassment of tax payers by officials— was a laudable initiative. 
As reported by The Economic Times, HC made the observations while hearing a writ petition filed by a Coimbatore-based chit fund company against certain additions made by the assessing officer, over cash deposits of Rs.67.37 lakh made by the company during the demonetisation period. 
The judge remarked that the assessing officer should have at least called for an explanation in writing before concluding that the amount collected and deposited by the petitioner was unusual. 
The judge opined that the assessment proceeding under the changed scenario would require determination of facts by proper exchange and flow of correspondence between the tax payer and the assessing officer. 
The finance ministry introduced the faceless assessment in October last year. Of the 58,322 cases selected under this so far, it has served digitally signed notices on 48,000 people.



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