Faceless Scrutiny (The Hindu)
Mains Paper 3: Economy
Prelims level: Faceless Scrutiny
Mains level: Pros and cons with the new Faceless Scrutiny system
- The new electronic assessment scheme for faceless scrutiny is being
touted by the Government as a landmark move to improve ‘ease of compliance’
for India’s harried income tax payers.
Pros and cons with the new system
- It may save taxpayers the hardship involved in presenting themselves at
the Income Tax office at the whims and fancies of an assessing officer,
faceless scrutiny as it stands now is unlikely to vastly simplify life for
- The scheme seeks to do away with the discretionary selection of IT
returns for scrutiny and obviate demands for bribes that accompany personal
hearings, by relying on a team-based selection of returns and dynamic
- But small tax-payers may still come up against three problems with the
- With low levels of digital connectivity and awareness in India’s
hinterland, requiring taxpayers to respond within 15 days to demand notices
through the e-filing system.
- Given the complex tax laws, it will take a lot of toing and froing and
uploading of voluminous documents, before a taxpayer can convince the
assessing unit of his tax claims.
- There are also enough exceptions built into the new rules that offer
ample scope for a determined assessing officer to side-line the ‘faceless’
- In truth, it is the IT departments habit of peppering small compliant
taxpayers with demand notices for measly sums, based on half-baked analysis
of data, that presents the biggest hindrance to ease of compliance.
- It isn’t re-assuring that four lakh taxpayers have already been picked
up for scrutiny this year.
- Completely doing away with scrutiny assessments for more compliant sets
of taxpayers such as the salaried, and setting a minimum bar on the value of
transactions that can be scrutinised, are better ways to end the harassment.
Q.1) With reference to the ‘Ration in Kind for the Defence Officers’,
consider the following statements:
1. Recently Government of India has announced the restoration of the ration
in kind for the officers of the three Armed Forces posted in peace areas.
2. Now all officers of the Armed Forces and central paramilitary forces
including those in peace stations will be getting ‘Ration in Kind’.
Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
Q.1) What are pros and cons with newly faceless Scrutiny tax sytem?