Artificial Intelligence In Tax Administration: Ensuring Transparency, Accountability And Constitutional Fairness In India
- IJLLR Journal
- 14 minutes ago
- 2 min read
Arpit Tripathi, Damodaram Sanjivayya National Law University
ABSTRACT
The increasing adoption of Artificial Intelligence (AI) has significantly reshaped tax administration by enabling revenue authorities to improve compliance monitoring, identify tax evasion, and enhance the overall efficiency of tax collection. In India, the Income-tax Department has introduced several technology-driven initiatives, including Faceless Assessment, the Annual Information Statement (AIS), Project Insight, and advanced data analytics, to modernise tax administration and promote voluntary compliance. Although these initiatives have streamlined administrative processes and reduced direct interaction between taxpayers and tax officials, they also raise important legal and constitutional concerns. The growing reliance on AI in administrative decision-making has generated questions regarding transparency, explainability, accountability, procedural fairness, data privacy, and the protection of taxpayer rights.
This paper examines the constitutional implications of AI-enabled tax administration in India by analysing whether the existing digital governance framework adequately safeguards the principles of equality, natural justice, and due process embodied in the Constitution of India. It further explores the challenges associated with algorithmic decision-making and the absence of a comprehensive legal framework governing the use of AI in tax administration. To provide a broader perspective, the study considers international approaches adopted by jurisdictions such as the OECD, the European Union, the United Kingdom, Australia, and Singapore. Based on this comparative analysis, the paper identifies existing regulatory gaps and suggests legal and policy reforms aimed at ensuring the responsible and accountable use of AI in tax governance. It concludes that while AI offers considerable opportunities to improve the efficiency and effectiveness of tax administration, its long-term legitimacy depends upon the establishment of a transparent, accountable, and constitutionally compliant regulatory framework that protects taxpayer rights while fostering technological innovation.
Keywords: Artificial Intelligence, Tax Administration, Digital Governance, Taxpayer Rights, Constitutional Law, Natural Justice, Algorithmic Accountability, Explainable AI.
