The Central Board of Direct Taxes (CBDT) has notified the Faceless Inquiry or Valuation Scheme, 2022 introducing artificial intelligence for the assessment proceedings under section 142 of the Income Tax Act.
Section 142(1) of the Income Tax Act 1961, empowers Income Tax authorities to issue a notice for making an assessment where return has been filed or if return has not been filed then to furnish the required information in the prescribed manner.
As per the notification, “automated allocation” means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources.
The scope of powers shall cover the following; (a) issuing notice under sub-section (1) of section 142 of the Act, (b) making inquiry before assessment under sub-section (2) of section 142 of the Act, (c) directing the assessee to get his accounts audited under sub-section (2A) of section 142 of the Act, (d) estimating the value of any asset, property or investment by a Valuation Officer under section142A of the Act, shall be in a faceless manner, through automated allocation, in accordance with and to the extent provided in section 144B of the Act with reference to making faceless assessment of total income or loss of assessee.
The Board has already notified the Faceless Jurisdiction of Income-tax Authorities Scheme, 2022 whereby the Board is using automated allocation to conduct income tax proceedings.
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