E-assessment (by CA Sonia Gambhir)

Sonia Gambhir
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To cut discretion at the hands of income tax officials and promote transparency, the government announced introduction of e-assessment for all by amending the Income-tax Act. Finance Minister Arun Jaitley while presenting the Union Budget for 2018-19 said that the government will roll out e-assessment across the country which will almost eliminate person-to-person contact.

The scheme stipulates that an Internet-based independent centralised communication centre (CCC) will be established in the Income Tax department that will “issue notice” to any person (under Section 133C of the Income Tax Act) who is required to furnish information or documents for the purpose of verification, to the taxman.

The notification, a copy of which is with PTI, stipulates that such notices will be issued by the designated tax department officials, who would only use their digital signature and send them to the assessees through e-mail, followed by an intimation through a text message. A machine-readable device kept at the CCC will receive the responses from the taxpayers

A jurisdiction-free assessment implies that a taxpayer in Delhi, for instance, could be assessed by a tax officer randomly selected by the online system of the tax department and located in any other part of the country. Such an assessment is aimed at minimising the scope for corruption and discretion by the tax officers and in turn, reduce the harassment for the taxpayers.

Exceptions to e-assessment

The CBDT vide instruction No. 3 dated August 20, 2018 has said that e-assessment will not be mandatory for assessments framed under Sections 153A, 153C, 147 and 144 of the Income-tax Act.

In a new set of instructions for its field officials, the Income Tax Department has stated that the new countrywide electronic assessment or e-assessments for 2018-19 will not be mandatory for scrutiny related to searches, income escaping assessment, late filing of returns beyond the prescribed deadline and cases where the taxpayer has filed tax return in paper mode.

The tax officials, however, would still be required to generate all departmental communications and notices through the department’s electronic platform, Income Tax Business Application (ITBA) for these cases, the instruction said.

Listing out seven exceptions, the Central Board of Direct Taxes (CBDT) in an instruction dated August 20 has said that e-assessment will not be mandatory for assessments framed under Sections 153A, 153C, 147 and 144 of the Income-tax Act.

Also, e-assessment will not be mandatory for set-aside assessments, assessments being framed in non-PAN cases, cases where income tax return was filed in paper mode and the concerned assessee does not have an e-filing account and in stations with limited bandwidth capacity. Additionally, e-assessment won’t be mandatory also for cases where substantial hearing had already taken place in conventional mode prior to the issuance of first set of instructions for e-assessment in February or where the principal commissioner/commissioner income tax permits conduct of assessment proceedings through the conventional mode.

Sections 153A and 153C of Income-tax Act relate to notices/assessment in relation to search and seizure. Section 147 provides for assessment or re-assessment by the Assessing Officer if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Section 144 allows assessing officer to, after giving the assessee an opportunity of being heard, make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment if he/she has failed to file returns beyond the prescribed limit in case the income is beyond the exemption limit.

In these seven cases where e-assessment is not mandatory, tax officials have been directed to undertake personal hearing where books of accounts have to be examined, where examination of witness is required to be made and where show cause notice contemplating any adverse view is issued by the assessing officer.

Pertinent aspects while conducting assessment proceedings through ‘E-Proceeding’

  • Enquiries before assessment in line with section 142(1) of Income Tax Act, the notice shall be delivered electronically to assessee in his e- filing account. In response to such notice the assessee shall have to verify it in the manner prescribed.
  • All departmental orders/communications /notices being issued to the assessee through under 'e-Proceeding’ facility will be digitally signed by the Assessing Officer.
  • Online submissions may be filed during the office hours on the date stipulated for compliance.
The facility for electronic submission of documents shall be closed seven days before the time barring date. In other cases, upon completion of proceedings, before passing of the final order by the concerned Assessing Officer ,the e-submission facility shall be closed after mentioning in electronic order sheet that ‘hearing has been concluded’. This is in volition of Assessing Officer’s powers. If need be, in exceptional circumstances, the concerned Assessing Officer may enable further filing of submissions electronically under intimation to the Range Head in ITBA.
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