The term “e-assessment”, in its broadest sense means the use of Information Technology Tools for the purpose of Assessments under the Income Tax Act, 1961.
The Finance Bill, 2016 which proposes to amend various provisions of the Income Tax Act, 1961 read with Rule 127 of Income Tax Rules, 1962 and the Notification No. 2/2016 issued by the Central Board of Direct Taxes (CBDT) aims to provide adequate legal framework for e-assessment in order to enhance the efficiency and reduce the burden of compliance.
- Amendments to the Income Tax Act, 1961
(a) The Finance Bill proposes to amend Section 282A so as to provide that notices and documents required to be issued by income-tax authority under the Act shall be issued by such authority either in paper form or in electronic form in accordance with such procedure as may be prescribed.
(b) The Finance Bill also proposes to insert sub-section (23C) to section 2 so as to define the words “Hearing” to include the communication of data and documents through electronic mode.
(c) The proposed amendments shall apply from 1 June 2016.
- Rule 127 of the Income Tax Rules, 1962
The Central Board of Direct Taxes (CBDT) vide Income-tax (18th Amendment) Rules, 2015 has notified Rule 127 for Service of notice, summons, requisition, order and other communication on 2nd December 2015.
“127. Service of notice, summons, requisition, order and other communication
(1) For the purposes of sub-section (1) of section 282 the addresses (including the address for electronic mail or electronic mail message) to which a notice or summons or requisition or order or any other communication under the Act (hereafter in this rule referred to as “communication”) may be delivered or transmitted shall be as per sub-rule (2).
(2) The addresses referred to in sub-rule (1) shall be –
(a) <Relates to physical communication and hence not repeated in this Article>
(b) For communications delivered or transmitted electronically-
(i) email address available in the income-tax return furnished by the addressee to which the communication relates; or
(ii) the email address available in the last income-tax return furnished by the addressee; or
(iii) in the case of addressee being a company, email address of the company as available on the website of Ministry of Corporate Affairs; or
(iv) any email address made available by the addressee to the income-tax authority or any person authorised by such income-tax authority.
(3) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall specify the procedure, formats and standards for ensuring secure transmission of electronic communication and shall also be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to such communication.”
- Notification No. 2/2016
The Principal Director General of Income tax (Systems) has specified by Notification No. 2/2016 the procedure, formats and standards for ensuring secured transmission of electronic communication in exercise of the powers conferred under sub-rule (3) of Rule 127.
- New Terms Defined:
|“electronic communication”||means electronic mail or electronic mail message or the display of an electronic record on the website of the Income Tax Department as may be specified|
|“electronic mail” and “electronic mail message”||means a message or information created or transmitted or received on a computer, computer system, computer resource or communication device including attachments in text, images, audio, video and any other electronic record, which may be transmitted with the message. [See Explanation to Section 66A of Information Technology Act, 2000 (21 of 2000).|
|“electronic record”||means data, record or data generated, image or sound stored, received or sent in an electronic form or micro film or computer generated micro fiche as defined in Clause (t) of Subsection (1) of Section 2 of Information Technology Act, 2000 (21 of 2000).|
5. The Websters 7th New Collegiate Dictionary defines the term “assess” is to determine the rate or amount of (as a tax); to impose (as a tax) according to an established rate; to subject to a tax, charge or levy; to make an official valuation of (property) for the purposes of taxation.
‘Assessment’ means the entire process of computation and levy of tax. Mahim Patram Pvt Ltd v. UOI (2007) 6 VST 248 (SC).
‘Assessment’ is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the taxpayer. ACIT v. Rajesh Jhaveri Stock Brokers Pvt Ltd (2008) 14 SCC 208, 215 (SC)