I-T dept pares relief to taxpayers as revenue mop-up thins amid lockdown

The directive has come in the wake of a significant drop in the direct tax collection in the first quarter of the FY21

With the lockdown, imposed at the beginning of the financial year, affecting its revenue collection significantly, the Income-tax (I-T) department has started the proceedings in all pending tax assessments matters, particularly in metro cities.

The National e-assessment Centre in a communique to all chief commissioners of Delhi, Mumbai, Chennai and Kolkata said, “The embargo to e-communicate with the pool of taxpayers (assessed under different regional e-assessment centres) has been lifted with immediate effect.”

The National e-assessment Centre is an independent office, set up by the Central Board of Direct Taxes (CBDT) to look after the work of e-assessment schemes for the taxpayers.

In May, the CBDT had directed tax officials not to keep any communication with assessees or issue scrutiny notices to them without the board’s approval. This is because such notices would have an “adverse effect” on the assessees amid the coronavirus (Covid-19) pandemic.

The letter from the e-assessment centre further directed tax officials to target 5,000 assessments per week in line with the CBDT action plan for the current financial year. “You may start with the proceedings in all pending assessments. The cases where partial response is on record may be prioritised,” it said.

BS reviewed the letter sent to chief commissioners.

This e-assessment centre, which was launched in October 2019,  is a part of the government’s ambitious plan to facilitate faceless assessment with dynamic jurisdiction which would bring about transparency, efficiency and standardisation of procedures by eliminating human interface between the taxpayer and the Income Tax Department.

Sources say that this directive has come in the wake of a significant drop in the direct tax collection in the first quarter of the FY21. The official figures till June 17 suggest that the gross direct tax collection came to Rs 1,73,970 crore, down 24.4 per cent as against Rs 2,30,245 crore of the same period in the previous year. While corporate advance tax payment due for June 15 showed a dip of 40 per cent.

The tax office also suggested a preface to restart the communication with the taxpayers and asked them to remain sensitive to difficulties faced by taxpayers due to Covid-19 outbreak.

It is advisable to start all communication with the following preface: We appreciate the anxiety and uncertainties that is facing all of us in the times of Covid-19. The communication is to assist you in ending one uncertainly, which is pending e-assessment in your case for the assessment year 2018-19, the letter quoted the preface.

“The earlier directives on adversarial communication were the part of the interim action plan for the first quarter (April-June) prepared by the direct tax body which now has been removed to re-start the proceedings, said an official.