Faceless Assessment under Income Tax Act
Faceless Assessment is introduced under section 144B w.e.f 1st of April, 2021 (added by Taxabtiom and Other Laws (Relaxation and Amendment of certain Provisions). Faceless Assessment means conducting the assessment proceedings electronically in ‘e-Proceeding’ facility through the registered account in the designated portal. Faceless Assessment was introduced to boost the scheme of digital India. It is another step towards transparent and taxpayer friendly tax regime.
Benefits of faceless assessment:
There are several benefits of faceless assessment. Some of them are mentioned below:
- Dynamic Jurisdiction
- No visit to income tax office
- Speedy Completion
- Team based assessment
- Reply to notice electronically
Procedure of Faceless Assessment
- The National Faceless Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143.
- The assessee may, within fifteen days from the date of receipt of notice, file his response to the National Faceless Assessment Centre;
- National Faceless Assessment Centre shall intimate the assessee that assessment in his case shall be completed in accordance with the procedure laid down under this section;
- The National Faceless Assessment Centre shall assign the case selected for the purposes of faceless assessment under this section to a specific assessment unit in anyone Regional Faceless Assessment Centre through an automated allocation system;
- Where a case is assigned to the assessment unit, it may make a request to the National Faceless Assessment Centre for further information, enquiry, documents or verification by verification unit; and for seeking technical assistance from the technical unit;
- Where such request is made, the National Faceless Assessment Centre shall issue appropriate notice or requisition to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit;
- The assessee or any other person, as the case may be, shall file his response to the notice , within the time specified therein or such time as may be extended on the basis of an application in this regard, to the National Faceless Assessment Centre;
- Where a request for conducting of certain enquiry or verification by the verification unit has been made by the assessment unit, the request shall be assigned by the National Faceless Assessment Centre to a verification unit in anyone Regional Faceless Assessment Centre through an automated allocation system;
- Where a request for seeking technical assistance from the technical unit has been made by the assessment unit, the request shall be assigned by the National Faceless Assessment Centre to a technical unitin any one Regional Faceless Assessment Centre through an automatedallocation system;
- the National Faceless Assessment Centre shall send the report received from the verification unit or the technical unit, based on the request referred to the concerned assessment unit;
- Where the assessee fails to comply with the notice referred or notice issued under sub-section (1) of section 142 or with adirection issued under sub-section (2A) of section 142, the NationalFaceless Assessment Centre shall serve upon such assessee a noticeunder section 144 giving him an opportunity to show-cause, on a date andtime to be specified in the notice, why the assessment in his case shouldnot be completed to the best of its judgment;
- The assessee shall, within the time specified in the notice referred or such time as may be extended on the basis of an application in this regard, file his response to the National Faceless Assessment Centre;
- Where the assessee fails to file response to the notice referred within the time specified therein or within the extended time, if any, the National Faceless Assessment Centre shall intimate such failure to the assessment unit;
- The assessment unitshall, after taking into account all the relevant material available on the record make in writing, a draft assessment order or, in a case where intimation is received from the National Faceless Assessment Centre, make in writing, a draft assessment order to the best of its judgment, either accepting the income or sum payable by, or sum refundable to, the assessee as per his return ormaking variation to the said income or sum, and send a copy of such orderto the National Faceless Assessment Centre.
- The assessment unit shall, while making draft assessment order,provide details of the penalty proceedings to be initiated therein, if any;
- The National Faceless Assessment Centre shall examine the draft assessment order in accordance with the risk management strategyspecified by the Board, including by way of an automated examinationtool, whereupon it may decide to finalise the assessment, or provide an opportunity to the assessee, in case any variation prejudicial to the interest of assessee is proposed, by serving a notice, or assign the draft assessment order to a review unit in any one Regional Faceless Assessment Centre.
- The review unitshall conduct review of the draft assessment order referred to it by the National Faceless Assessment Centre where uponit may decide to concur with the draft assessment order and intimate the National Faceless Assessment Centre about such concurrence; or suggest such variation, as it may deem fit, in the draft assessment order and send its suggestions to the National Faceless Assessment Centre;
- The National Faceless Assessment Centre shall, upon receiving suggestions for variation from the review unit, assign the case to an assessment unit, other than the assessment unit which has made the draft assessment order, through an automated allocation system;
- The assessment unit shall, after considering the variations suggested by the review unit, send the final draft assessment order to the National Faceless Assessment Centre;
- The assessee will have a chance to show cause the National e-Assessment Centre.
- National e-Assessment Centre shall finalise the assessment within the time allowed and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice.
Faceless Assessment will impart greater efficiency, transparency and accountability by—
(a) eliminating the interface between the income-tax authority or
Valuation Officer and the assessee or any person to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing a team-based issuance of notice or making of enquiries or issuance of directions or valuation with dynamic jurisdiction.