E-Proceeding of Income Tax: An Information Revolution in Tax Administration

Over the last several years, the Income Tax Department of India has progressed considerably in the direction of the digitalization of tax processes. One of the most notable and taxpayer-centric developments in the digital journey of the department has been the implementation of E-Proceeding in the Income Tax Act. The system of physical notices, oral hearings, and paper submissions has, with the passage of time, given place to a faceless, transparent, and efficient system.

It will cover in detail the notion of E-Proceeding of Income Tax Act, its benefits, process, scope, legal framework, and tax payer liabilities.

What are the E-Proceedings Under Income Tax?

E-Proceeding refers the electronic proceedings of assessment or scrutiny proceedings either through the e-Filing portal of the Income Tax Department or the Faceless Assessment Scheme platform. It enables tax officials and taxpayers to correspond in electronic media, reducing face-to-face encounters as much as possible, and increasing transparency in the assessment proceedings.

E-Proceeding facility allows for expeditious disposal of scrutiny, assessment, and other proceedings without the taxpayer personally visiting the Income Tax Office.

Legal Framework of E-Proceeding

Legal basis of E-Proceeding was established under:

• Section 143(3A) of the Income Tax Act: Allows the government to provide notifications about faceless assessment schemes.
• Section 282: Specifies the methods of serving notice and communications through electronic means.
  CBDT Notification No. 61/2017 of 13th July 2017: Officially inaugurated the operation of E-Pro
• The Income Tax (Faceless Assessment) Scheme, 2019: Expanded the reach of digital assessment to make it faceless and jurisdiction-free.

E-Proceeding module can be accessed using the Income Tax e-Filing Portal and has now also been integrated into the Faceless Assessment and Appeal Systems.

Why E-Proceeding?

It has the following chief objectives in mind:

• Maintain transparency and reduce human interface.
• Evaluations must be prompt and expedient.
• Achieve a paperless, time-bound, and traceable process.
• Refrain from corruption and harassment.
• Improve taxpayer services and accountability.

Key Characteristics of the E-Proceeding System

Feature	Description
Electronic Notices	Notices, questionnaires, and orders are all provided by electronic means.
Electronic Submission	Taxpayers can submit responses, documents, and supporting evidence using the portal.
No Physical Appearance	Unless otherwise expressly necessary, no need to physically visit the tax office.
Timestamped Record	Each action, including submission, is timestamped, ensuring transparency.
PAN-based Authentication	Each interaction has a direct link with the PAN and user profile.

Types of Cases Handled through E-Proceeding

Since the inception of the E-Proceeding, the Department of Income Tax has moved several of its proceedings onto this electronic medium. At Legal N Tax, we have effectively dealt with numerous types of cases using the platform of the E-Proceeding. These are some of the most frequent sorts:

1. Scrutiny Assessments (Section 143(3))
   These are in-depth evaluations triggered when the tax official wishes to confirm the accuracy of the return filed. With the aid of E-Proceeding, we assist clients in:
   • Responding to detailed questionnaires
   • Supporting large claims of exemption or deductions
   • Rectifying income mismatches or expense rationales
   • Providing audit reports and supporting documents
2. Limited Scrutiny Cases
   These are the ones that are selected for audit of certain issues only, such as income disparity or deductions. These tend to be shorter and less in-depth.
3. Cases of Reassessment (Section 148/147)
   A department may also re-audit the cases if they suspect that the income has eluded assessment. In such cases, we facilitate:
   • Providing exhaustive replies to reasons for reopenings
   • Preparation of supporting documents to establish non-taxability or prior disclosure
   • Digital representation of the taxpayer upon re-assessment
4. Income Mismatch and Verification Notices (Section 143(1)(a) & 142(1))
   These notifications seek additional clarification on discrepancies in returns or supporting documentation for corroboration.
5. Penalty Proceedings (Section 270A, 271, etc)
   Non-compliance, non-disclosure, or misreporting can call for penalties. The e-Proceeding allows filing of submissions and replies in response to show cause notices.
6. Disallowance of Deductions or Exemptions
   Certain of the deductions allowed under sections like 80G, 80D, 54, 10(10D) etc. may be emphasized. We help clients in:
   • 80G Receipts for Donations
   • Health insurance details in 80D
   • Property sale/purchase documents for 54 exemptions
7. Contested Tax Demands and Rectification (Section 154)
   In the event an assessment order has a seeming error, a rectification request may be lodged. We can help in:
   • Online submission of rectification requests
   • Providing supporting documents
   • Digital communication with CPC and AO
8. DTAA and NRI Tax Matters
   NRIs are generally liable to TDS on rents or interest received in India. We assist in:
   • Requesting DTAA relief
   • Form 10F, PAN, TRC Submission
   • Section 195 notices and Section 197 notices response

Faceless Assessment or E-Proceeding: Are they Different?

True — although the technology platform is still the E-Proceeding, the Faceless Assessment accounts for the system and policy transformation.
• E-Proceeding: Available for individual officers (e.g., local AO)
• Faceless Assessment Scheme: It involves jurisdiction-free assessment with centralised communication.

Documents Often Requested in E-Proceeding

Nature of Query	Sample Documents
Income mismatch	Salary slips, Form 16, bank statements
Value transfers	Evidence of investments, purchase/sale deeds
Business revenue	Accounting books, bills, GST returns
Deductions made for	LIC premium, tuition fee, rent receipts
Capital gains	Contract notes, purchase/sale deeds, Demat statements

Forms of Communication in E-Proceeding

All communication occurs by electronic means using:

• Email Notification – Received on registered email ID
• SMS Alerts – Received on Mobile number associated with portal
• Login-Based Access – Orders and notices after login

Concerns Faced by Taxpayers

• Technical Problems: Gateway difficulties during the busiest periods.
• Misinterpretation of notices: Complex language.
• Document Upload Restrictions: Size or format constraints.
• Response Timelines: Hard deadlines.
• Not Obtaining Professional Help: Very few taxpayers know that they can designate representatives.

Role of Authorized Representative (AR) in E-Proceeding

Taxpayers may authorize a Chartered Accountant, Tax Consultant, or Lawyer as their Authorized Representative (AR) to handle e-Proceedings on their behalf.

The AR can:

• Log in and submit replies
• Attend e-hearings (if any)
• Upload documentation whether legal or financial
• Represent the taxpayer in appeals

An authorization letter or form may be required for registration as AR. Legal N Tax has the finest teams of Cas, Lawyers and Tax Consultants of Delhi

Benefits of E-Proceeding for Taxpayers

• Convenience: Taxpayers may file from anywhere (home/ office)
• Speed: Timely and Rapid resolutions
• Transparency: All communications are logged
• Accessibility: 24x7 portal access, no fixed working hours
• Cost Saving: Reduces cost of travel and documentation

Best Practices by Legal N Tax

• Regularly monitor emails and portal
• Keep the records updated
• Keep deadlines.
• Consultancy from Professionals
• Present in clear terms.

Conclusion

India’s Income Tax Department has taken a major step forward in making tax administration faceless, paperless, and taxpayer-friendly through the facility of E-Proceeding under Income Tax. It eliminates unnecessary physical visits, speeds up the process, and improves trust in the system.

However, with this convenience comes the responsibility of being vigilant, compliant, and well-organized. Taxpayers must keep track of communications and provide timely, accurate responses. At Legal N Tax, we specialize in helping individuals and businesses manage their E-Proceeding notices, prepare detailed replies, submit representations, and guide clients through assessments and appeals.

Facing Problems? Contact Legal N Tax, one of the best Consultant for E proceedings in India for professional help with E-Proceeding and Faceless Assessments.