I-T department empowered to demand info from taxpayers for e-verification

The government has empowered the income tax department to gather more information from the taxpayers on digital mode and reconcile it with information received from various sources within a period of 90 days.

If there is any discrepancy between the amount accepted by the assessee and the amount reported after such first e-verification, the information will be run through a risk management strategy to be laid down by the Central Board of Direct Taxes (CBDT). In case, the information found to be no or low risk and where no further action is required, it will be processed for closure.

However, if the information is not found to be of low risk, it will be passed to intelligence and criminal investigation.

Through a notification, tax authorities have been given powers to inspect registers of companies.

The intention is to bring more transparency within the tax agencies and streamline the process of uncovering serious tax evasion or money stashed abroad, said Om Rajpurohit- Director (Corporate & International Tax) with AMRG & Associate.

All information and interactions are to be done on digital mode. In exceptional cases, the assessee can request for a personal hearing over video conferencing depending on technology limitations.

"This may be unfair to the taxpayer because reconciliation of information by personal hearing would be a better choice," Rajpurohit said.

Neeraj Agarwala, partner at Nangia Andersen India, said it is clear from this notification, that the department will now be relying on technical algorithms to flag mismatch in data, and initiating inquiries only in case of high risk transactions.

This is in line with the general principle of the government to ensure greater efficiency, transparency and accountability by eliminating the interface between the income tax authority and the assessee or also relying on technology for optimizing utilization of the resources, he said.

Sandeep Sehgal, director-- tax and regulatory-- AKM Global, a tax consultancy firm, said no grant of personal hearing under the faceless assessment has already led to several issues in terms of the violations of principles of natural justice and the matter is already sub judice. "This notification may add to the concerns of the taxpayers at large especially where complex matters are involved in which personal hearing is quite important."