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I-T department to use email for issuing notices

In welcome news for taxpayers, the IT department has decided to launch a new system of issuing email notices to which an assessee can respond electronically, obviating the need for a physical interface with the taxman which often led to complaints about harassment.

The Central Board of Direct Taxes, the apex policy-making body of the IT department, is working on a strategy to create the required processes and capacity in this regard.

"We have been thinking how can we make life easier for taxpayers especially for those who are in the middle and the slightly higher tax bracket. So, now we are thinking of allowing that when a notice is issued in an assessment or scrutiny case, the taxpayer can send the department an e-response. 

"We are trying to resolve some security issues in this regard now after which it could be implemented," CBDT Chairperson Anita Kapur said.

Explaining the procedure, Kapur said if a taxpayer provides the department with a bonafide email address in his Income Tax Return (ITR), the Board will be able to send him an e-notice and not a paper document dispatched through post for which he usually has to travel and meet the Assessing Officer (AO). "The taxpayer can respond through the email and if we have some more queries we give you another notice by the electronic medium so that both the AO and the taxpayer remain in an e-environment and, may be, during the final hearing when the AO wants to close the matter, the taxpayer can come once to the tax office," the CBDT chief said.

She said the purpose of introducing the system was to reduce the interface between the taxpayer and the AO. "The taxpayer can send documents over email, scan them, upload them and it's over," she added.

"It (scrutiny session) should be over and should not go beyond that. This is the way we are trying to address the issues of compliance and limiting the interface between the taxman and the taxpayer. 

This will be a sea change in our tax administration," Kapur said. Tax experts say the initiative will also ensure <g data-gr-id="44">privacy</g> of a taxpayers' communication with his AO and the tax department. The CBDT chief said she was aware of instances where the taxpayers complained about the AO raising numerous queries upon meeting the assessees despite their earlier order sheets having mention of only a few queries.

"This (sending emails) is one way of giving both the taxpayer and the <g data-gr-id="43">AO</g> a good opportunity to solve their things without any problem. It has also been mentioned in our earlier instructions to the field that the questionnaire sent to the taxpayer in scrutiny cases should be focused and specific so that the person knows what is he being enquired about. "We are trying to do this for a medium-level taxpayer and others," Kapur said, adding she hopes this would bring down taxpayers' complaints. 

FinMin seeking  ministries’ comments on shell PDMA
The Finance Ministry is seeking comments of other ministries on <g data-gr-id="191">creation</g> of a shell public debt management agency (PDMA), an interim arrangement before the launch of a full-fledged agency to manage government debt. “A draft Cabinet note on shell public debt management agency has been circulated for seeking inter-ministerial comments,” sources said. Shell PDMA would an interim arrangement before an independent agency is set up for managing the government borrowing programme. At present, RBI is handling the government’s borrowing programme. The setting up of PDMA would require amendments to the RBI Act. The agency would be set up after the Cabinet <g data-gr-id="188">approval,</g> while a full-fledged PDMA would become operational only after amendment into the RBI Act.

When asked if a Bill in this regard is expected in the upcoming Winter Session of Parliament, sources refrained from giving a timeline. According to sources, the interim arrangement or shell PDMA will also take over the functions of the middle office, which is currently with the ministry. The middle office looks after formulation of a long-term debt management strategy, fixing roadmap for annual debt issuance and forecasting borrowing requirement and setting up of a comprehensive risk management framework.

The shell PDMA will later outsource back office work of administration and collation of data to either RBI or NSDL, sources said. The Finance Ministry in Budget had proposed to set up PDMA to manage government debt and also to shift the regulation of government bond from RBI to Sebi. However, due to opposition from RBI, the proposal could not go through.
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