ALL YOU NEED TO KNOW ABOUT FACELESS ASSESSMENT


Faceless Assessment
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The faceless scrutiny assessment has been devised for greater transparency, greater efficiency, and accountability. The taxpayers or their representatives can submit their responses and documents right away from their homes or offices. The cases will be selected on a random basis by the use of artificial intelligence and data analytics tools. The scheme aims to eliminate the interface between taxpayer and tax officers.

FEATURES OF FACELESS ASSESSMENT SCHEME

  1. Selection of cases for scrutiny by using data analytics and Artificial Intelligence
  2. Abolition of territorial jurisdiction. Every case will be assessed outside the local jurisdiction of the assessee.
  3. Central Issuance of notices with Document Identification Number (DIN)
  4. No physical interface, no need to visit the income tax office (exceptions mentioned below).
  5. Team-based assessment and team-based review. Every case is reviewed by different teams selected on a random basis.
  6. Draft assessment order in one city, review in another city and finalization in third city.

PROCESS OF FACELESS ASSESSMENTS

  1. Notice issued by NeAC (National E-Assessment Centre) u/s 143(2) & 144(1)

2. Assessee Need to submit Response within 15 Days to NeAC

3. NeAC shall assign the case to a specific unit in any one ReAC (Regional E-Assessment Centre) on Random Basis

4. Assessment Unit make request to the NeAC

  • for documents and information from assessee or any either person
  • for conducting certain inquiry or verification by the verification unit
  • for seeking technical assistance from the technical unit

5. The NeAC shall issue appropriate requisition or notice to the assessee or any person for obtaining information or documents requested by the assessment unit.

6. The assessee or other person shall file response against the notice to NeAC within the specified time

7. Where a request for conducting certain inquiries or verification made by the assessment unit, the request shall be assigned by the NeAC to the verification unit in a ReAC on a random basis.

8. Request for seeking technical assistance from the technical unit by assessment unit, if any, shall be assigned by the NeAC to a technical unit in a ReAC on a random basis.

9. NeAC shall send the report received from the technical unit or verification unit to the concerned assessment unit.

10. After making an assessment, the assessment unit shall send a draft assessment order to the NeAC

11. NeAC shall examine the draft assessment order in accordance with the risk management strategy specified by the board.

12. After examining the draft order NeAC either:- *

  • Finalize the order and issue final order with notice of penalty and notice of demand or process the refund
  • Provide an opportunity to the assessee, in case of modification proposed from returned income
  • Assign the draft order to a review unit in any one ReAC on a random basis for conducting a review of such order

13. Review unit shall review the draft order referred to it by NeAC and it may either:

  • Conclude the draft assessment order and intimate to NeAC about its conclusion; or
  • Suggest a modification to the draft order and send its suggestions to the NeAC

Repeat Above Process*

14. After receiving suggestions for modification from review unit NeAC shall assign the case to an assessment unit, other than the assessment which made initial draft assessment order on a random basis.

15. Assessment unit after considering suggestions of Review Unit, send the final draft assessment order to the NeAC.

Repeat Above Process*

16. Where opportunity being heard given to the assessee as mentioned above in sub-point 2 of point 12, the assessee may furnish his response to the NeAC on or before the date specified in the notice.

17. Where no response received from the assessee the NeAC shall finalize the assessment as per draft assessment order as given in sub-point 1 of point 12. If the response received from Assessee the response shall be shared with the concerned assessment unit.

18. The assessment unit shall after considering the response furnished by the assessee, make a revised draft assessment order and send it back to NeAC.

Repeat Above Process*

19. The NeAC shall after completion of the assessment, transfer all the electronic records of the case to the Jurisdictional AO.

20. The PCCIT or Principal Director General, in charge of NeAC, may at any stage of assessment, if considered necessary, can transfer the case to the Jurisdictional AO, with the prior approval of CBDT.

21. In case of the opportunity of being heard given to assessee against draft assessment order, the assessee or his authorized representative may request a personal hearing to make his oral submissions or present his case before the income tax authority in any unit under the scheme.

22. Where the request for personal hearing approved by CCIT or Director-General, in charge of ReAC, such hearing shall be conducted exclusively through video conferencing, in accordance with procedure laid down by the board, if any.

EXCEPTIONS OF FACELESS ASSESSMENTS

Cases relating to Serious Fraud, Major Tax Evasion, Sensitive and Search cases, International Tax, Black Money Act & Benami Property are not covered under Faceless assessment.

Note: Currently, there is no clarification on Transfer pricing proceedings but as per current notification, its presumed that Transfer pricing proceedings will also be covered under Faceless Assessment.

Note: Same procedure to be followed for appeals and every appeal before the Income Tax Department to be faceless appeal w.e.f. 25th September 2020. 

Have any Question or Comment?

9 comments on “ALL YOU NEED TO KNOW ABOUT FACELESS ASSESSMENT

Jyoti Jaiswal

Nicely and explained with clarity.

Reply

Thank You very Much Jyoti

Reply
Anurag Bhasin

Such great explanantions and easy to grasp.

Reply

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