Faceless Schemes under the Act
The Central Government has undertaken a number of measures to make the processes under the Act, electronic, by eliminating person to person interface between the taxpayer and the Department to the extent technologically feasible, and provide for optimal utilisation of resources and a team-based assessment with dynamic jurisdiction. A series of futuristic reforms have been introduced in the domain of Direct Tax administration for the benefit of taxpayers and economy. This started with faceless assessment in electronic mode involving no human interface between taxpayers and tax officials. The faceless procedures are being introduced in a phased manner in the Act.
2. As part of this process of making the tax administration transparent and efficient, provisions for notifying faceless schemes under sections 92CA, 144C, 253 and 264A were introduced in the Act through Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 with effect from 01.11.2020 and under section 255, was inserted through Finance Act, 2021 with effect from 01.04.2021:
| S.No. | Section | Scheme | Date of Limitation |
| 1. | 92CA | Faceless determination of arm’s length price | 31st day of March, 2022 |
| 2. | 144C | Faceless Dispute Resolution Panel | 31st day of March, 2022 |
| 3. | 253 | Faceless appeal to Appellate Tribunal | 31st day of March, 2022 |
| 4. | 255 | Faceless procedure of Appellate Tribunal | 31st day of March, 2023 |
3. Section 92CA and section 144C are principally related to the transfer pricing functions and international taxation which are presently out of the regime of faceless assessment. New schemes for these two functions are a part of the assessment function and should follow the faceless assessment procedure, wherein certain modifications are proposed which will have an impact on the information technology structure. Therefore, notification at this time shall result in delay in stabilization of the systems.
4. As for notification of scheme under section 255, the Appellate Tribunal is deemed to be a civil court for all the purposes of section 195 of the Act and Chapter XXXV of the Code of Criminal Procedure, 1898. Therefore, a scheme governing the procedures to be followed by such a body needs to be formulated after due consultations with Ministry of Law & Justice. Similarly, the scheme under section 253 have to follow the scheme under section 255.
5. In light of the above limitations it is proposed to extend the date for issuing directions for the purposes of these sections 92CA, 144C, 253 and 255 till 31st March, 2024.
6. These amendments will take effect from 1st April, 2022.
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Note on clause 24, 43, 70 and 71 of Finance Bill 2022
Clause 24 seeks to amend section 92CA of the Income-tax Act relating to Reference to Transfer Pricing Officer.
The said section, inter alia, empowers the Central Government to notify a scheme for the purposes of determination of the arm’s length price so as to impart greater efficiency, transparency and accountability by––
(a) eliminating the interface between the Transfer Pricing Officer and the assessee or any other person to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing a team-based determination of arm’s length price with dynamic jurisdiction.
Sub-section (9) of the said section further provides that for the purposes of giving effect to the aforesaid scheme, the Central Government may by notification in the Official Gazette direct that any of the provisions of the Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified.
It is proposed to amend the proviso to the said sub-section (9), extending the date for issuing directions for the purposes of the said sub-section from 31st day of March, 2022 to 31st day of March, 2024.
This amendment will take effect from 1st April, 2022.
Clause 43 seeks to amend section 144C of the Income-tax Act relating to Reference to dispute resolution panel.
The said section, inter alia, empowers the Central Government to notify a scheme for the purposes of issuance of directions by the dispute resolution panel so as to impart greater efficiency, transparency and accountability by—
(a) eliminating the interface between the dispute resolution panel and the eligible assessee or any other person to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing a mechanism with dynamic jurisdiction for issuance of directions by dispute resolution panel.
Sub-section (14C) of the said section further provides that for the purposes of giving effect to the aforesaid scheme, the Central Government may by notification in the Official Gazette direct that any of the provisions of the Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified.
It is proposed to amend the proviso to the said sub-section (14C), extending the date for issuing directions for the purposes of the said sub-section from 31st day of March, 2022 to 31st day of March, 2024.
This amendment will take effect from 1st April, 2022.
Clause 70 seeks to amend the section 253 of the Income-tax Act relating to Appeals to the Appellate Tribunal.
The said section, inter alia, empowers the Central Government to notify a scheme for the purposes of appeal to the Appellate Tribunal so as to impart greater efficiency, transparency and accountability by––
(a) optimising utilisation of the resources through economies of scale and functional specialisation;
(b) introducing a team-based mechanism for appeal to the Appellate Tribunal, with dynamic jurisdiction.
Sub-section (9) of the said section further provides that for the purposes of giving effect to the aforesaid scheme, the Central Government may by notification in the Official Gazette direct that any of the provisions of the Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified.
It is proposed to amend the proviso to the said sub-section (9), extending the date for issuing directions for the purposes of the said sub-section from 31st day of March, 2022 to 31st day of March, 2024.
This amendment will take effect from 1st April, 2022.
Clause 71 seeks to amend section 255 of the Income-tax Act relating to procedure of Appellate Tribunal.
The said section, inter alia, empowers the Central Government to notify a scheme for the purposes of disposal of appeals by the Appellate Tribunal so as to impart greater efficiency, transparency and accountability by –
(a) eliminating the interface between the Appellate Tribunal and parties to the appeal in the course of appellate proceedings to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing an appellate system with dynamic jurisdiction.
Sub-section (8) of the said section further provides that for the purposes of giving effect to the aforesaid scheme, the Central Government may direct that any of the provisions of the Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified.
It is proposed to amend the proviso to the said sub-section (8), extending the date for issuing directions for the purposes of the said sub-section from 31st day of March, 2023 to 31st day of March, 2024.
This amendment will take effect from 1st April, 2022.
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Extract of clause 24, 43, 70 and 71 of Finance Bill 2022
24. Amendment of section 92CA.
In section 92CA of the Income-tax Act, in sub-section (9), in the proviso, for the figures “2022”, the figures “2024” shall be substituted.
43. Amendment of section 144C.
In section 144C of the Income-tax Act, in sub-section (14C), in the proviso, for the figures “2022”, the figures “2024” shall be substituted.
70. Amendment of section 253.
In section 253 of the Income-tax Act, in sub-section (9), in the proviso, for the figures “2022”, the figures “2024” shall be substituted.
71. Amendment of section 255.
In section 255 of the Income-tax Act, in sub-section (8), in the proviso, for the figures “2023”, the figures “2024” shall be substituted.
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