The government has introduced the Faceless Penalty Scheme 2021 which will digitise issuing of penalties on assessee …. Notification No. 03/2021-Dated 12th January, 2021

The scheme specifies setting up of national faceless penalty centres, regional penalty centres, penalty units and review units for execution of penalty proceedings, such that a penalty order is issued correctly and undergoes review before being issued to an assessee.. It will digitise issuing of penalties on assessee and shall become effective from 12.01.2021….a new sub-section (2A) Section 274 under Chapter XXI of the Act.

Earlier, on 13.08.2020, CBDT notified the Faceless Assessment Scheme, 2020 vide Notification No. 60/2020 and on 25.09.2020 the Faceless Appeal Scheme, 2020 was notified vide Notification No. 76/2020 dated 25.09.2020.

Faceless Penalty Scheme 2021  is on same lines as Faceless Assessment Scheme, 2020 and Faceless Appeal Scheme, 2020 and in line with these, the penalty proceedings shall also be decided by a team of income-tax authority with dynamic jurisdiction. Briefly the initial procedure under the scheme is as under:

National Faceless  Penalty Centre shall have the power to initiate penalty proceedings and issue a show-cause notice for imposition of penalty or recommended initiation of penalty proceedings…. the National Faceless Penalty Centre shall in a case, where reference has been received as per clause

(i), assign such case to a specific penalty unit in any one of the Regional Faceless Penalty Centres through an automated allocation system;

(iii) where in a case assigned to a penalty unit, initiation of penalty proceedings has been recommended, such unit, after examination of the material available on record, may decide to,—

  • agree with the recommendation and prepare a draft notice calling upon the assessee to show cause as to why penalty should not be levied under the relevant provisions of the Act;
  • or (b) disagree with the recommendation, for reasons to be recorded in writing, and send such draft notice or the reasons, as the case may be, to the National Faceless Penalty Centre;

© National Faceless Penalty Centre shall upon receipt of the draft notice or reasons referred to in

clause (iii) from the penalty unit,—

(a) serve the show-cause notice, as per the draft referred to in sub-clause (a) of clause (iii), upon the assessee specifying the date and time for filing a response;

Or (b) not initiate penalty in cases referred to in sub-clause (b) of clause (iii);

A person shall not be required to appear either personally or through authorised representative in connection with any proceedings under the Scheme before the income-tax authority set up under the  Scheme.

Every notice or order or any other electronic communication under the said Scheme shall be delivered to the addressee at his registered email address.

The assessee or his authorised representative may request for personal hearing so as to make his oral submissions or present his case before the penalty unit under the said Scheme.

The Chief Commissioner or the Director General, in charge of the Regional Faceless Penalty Centre, under which the concerned penalty unit is set up, may approve the request for personal hearing, as referred to in sub-paragraph (2), if he is of the opinion that the request is covered by the circumstances laid down under clause (ix) of sub-paragraph B of paragraph

In such case hearing shall be conducted exclusively through video conferencing, including use of any telecommunication application software which supports video telephony,

Author Bio

Qualification: CA in Practice
Location: SHIMLA, Himachal Pradesh, India
Member Since: 12 Apr 2021 | Total Posts: 3
Have expertise in taxation matters and experience of more than four decades in addition to usual accounting audit and financial matters View Full Profile

My Published Posts

More Under Income Tax

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

May 2021