The Faceless Assessment Scheme is one of the biggest Direct Tax reforms in India based on Key Principles of Efficiency, Transparency and Accountability.
The Income Tax Department is bringing about a pardigm shift in building the future with technology by pioneering an ecosystem of assessments and appeals founded on Data and AI. Faceless Assessment is transforming Indian Tax Administration.
The features of the Faceless Assessment Scheme are:
> Data driven selection of cases for scrutiny using data analytics and Artificial Intelligence.
> Abolition of territorial jurisdiction. Return of a taxpayer belonging to one city would be scrutinized anonymously by AOs based in other city
> Automated random allocation of cases to Assessment Units through computer.
> Centralised issue of notices using unique Document Identification Number (DIN) through electronic modes.
> No human interface and no need to visit the Income Tax Office.
> All Response to be submitted electronically.
> Team-based assessments and team-based review.
> Functional Specialisation for specific parts of assessment by different specialized units.
> Only a single point of faceless contact between the taxpayer and the Department.
> Adverse Draft Assessment Order shall be provided to taxpayer for response before finalization of the assessment order.
> Dynamic Jurisdiction : Draft assessment order in one city, review in another city and finalisation in a third city.
> Ease of tax compliance through uniformity in application of law.
How would you know that your case has been picked up for faceless e-Assessment?
You will receive notice under section 143(2) 1 of the Act digitally signed by NeAC officer in
your registered account with e-filing (www.incometaxefilingindia.gov.in) followed by real time alert in the form of an sms and/or email.
What should you do then?
a) You should log in to your e-filing account on the portal: https://www.incometaxindiaefiling.gov.in/home. If the notice carries the following logo and is signed by an officer of National e-Assessment Centre (NeAC), then it means your case has been picked up for scrutiny under the faceless assessment proceedings.
b) You are required to file your response to notice issued u/s 143(2). You should try to provide a comprehensive reply, by the date and time specified in the notice, on the issues pointed out in the notice itself. The reply to the notices received is to be filed through your e-filing account ONLY.
What happens after I file my reply to the notice u/s 143(2)?
a) If the Assessment Unit is satisfied with your reply, the Assessment Unit shall prepare a draft assessment order, which will be subjected to a computer-run Risk Management Strategy tool. RMS shall identify if the case needs to be reviewed by the Review Unit. If there is no Review or after Review, there are no modifications, then a final assessment order shall be received by you.
b) If the Assessment Unit requires further information then you will receive a notice u/s 142(1) along with a questionnaire in your e-filing account and on your registered email id along with a real time sms alert. Please file reply to the questionnaire along with supporting documents wherever required or sought. Please file only relevant and necessary information. If you want to seek adjournment, you may do so through the facility available in your e-filing account.
c) If the Assessment Unit is not satisfied with your reply(ies) and it wants to make any modification to your income, it shall issue a Show Cause Notice to you, along with copy of the Draft Assessment Order. You can file your reply to the said Show Cause Notice. You may also request personal hearing through video conferencing. Your request, if approved under the applicable guidelines will be conducted through Video Conferencing only.
d) After considering your reply to the said Draft assessment Order/Show Cause Notice, if any filed by you, a final Assessment Order alongwith annexures shall be received by you. It means that the Assessment is complete.
What to do if I am not satisfied with the Assessment made?
After completion of assessment, all the digital records in respect of your Assessment, will be transferred to your jurisdictional Assessing Officer, who would be responsible for post-assessment work. Therefore,
a) if you want to file appeal against the assessment made or penalty order passed, you may file the same through e-appeal under National Faceless Appeal Centre (NFAC).
b) if you want to file any rectification application, the same should be filed with your jurisdictional Assessing Officer.
What is expected from the taxpayer?
a) Please file your reply electronically through your e-filing account ONLY.
b) Since all communication on the e-filing portal will also be communicated through e-mail, please ensure that you provide the correct email id in your Return of Income.
c) Even if you are availing services of a Tax Professional, you are advised to know your e-filing portal login password.
d) There is no need to file physical copies of your replies in any Income-tax office.
e) You shall not be required to attend either in person or through authorised representative before any Income-tax authority, in connection with these proceedings. If personal hearing is required, the same would be through video conferencing only.
f )Please file your responses within the specified time. If more time is needed, then please seek reasonable time through an adjournment application on the e-filing portal.
g) Dedicated NeAC e-mail : As a part of enhanced Taxpayer services and to further streamline the #Faceless Assessment process, a dedicated e-mail ID feedback.notice.neac@income tax.gov.in has been made functional by Income Tax Department, for taxpayers to register feedback pertaining to Faceless Assessment Scheme. This e-mail ID will be closely monitored by a team at National e-Assessment Centre.
Excepions to Faceless assessment
The Scheme as of now excludes assessments made by International Taxation jurisdictions and assessments following Income Tax search and other cases that may be assigned to Central Charges. The Scheme provides that the Pr.CCIT(NeAC) can transfer a case at any stage of proceedings to the Jurisdictional Assessing Officer with the approval of the CBDT.
(Article was last Updated in January 2021)