In the case of Lakshya Budhiraja [2021] 131 taxmann.com 51 (SC), the additional solicitor general submitted that the department is considering the change in Faceless Appeal Scheme, 2020. Hon’ble Supreme Court of India had allowed Additional Solicitor general time of 3 months to get it implemented. Meeting the deadline and time allowed by the Hon’ble Supreme court, CBDT has issued the New Faceless Appeal Scheme, 2021 effective from 28-12-2021. The new scheme is notified in suppression of the earlier Faceless Appeal Scheme, 2020.
Key changes in the new Faceless Appeal Scheme, 2021, in comparison to the old Faceless Appeal Scheme, 2020:
- The CBDT has renamed the National e-Assessment Centre to National Faceless Assessment Centre. However, the board has already changed the name vide Circular F. No. 187/3/2020-ITA-I dated 8-4-2021, but that was done in the Faceless Assessment Scheme, 2019. Now, the same has been incorporated in the Faceless Appeal Scheme, 2021.
- The new scheme has replaced the word ‘may’ with ‘shall’ with respect to allowing requests for a personal hearing. Thus, it would be mandatory for the Commissioner (Appeals) to allow a personal hearing if the taxpayer requests it during e-proceedings.
- In the new scheme, there is no concept of a draft order, now the commissioner (Appeals) shall prepare an appeal order and send it to National Faceless Appeal Centre (NFAC) after signing the same digitally. After that, the NFAC shall communicate such order to the appellant. Instead in the old scheme, the appeal unit first prepare the draft order and that order was sent to another appeal unit for review. It reduces the duplicity of work.
- In the new scheme, the department reduces the level of RFACs for the conduct of e-appeal proceedings, now, an appeal is directly assigned to the Commissioner (Appeals) of a specific Appeal Unit. Rather in the old scheme, where NFAC assign the appeal to RFAC and then the e-appeal proceedings are taken by one or more commissioner (Appeals).
- The erstwhile scheme of faceless appeal had provided that the appeal unit shall have one or more Commissioner (Appeals) and other income-tax authority/staff to assist them. Under the Faceless Appeal Scheme, 2021, the appeal unit shall have one Commissioner (Appeals) and other income-tax authority/staff to assist him.
- Under the erstwhile scheme, for any non-compliance with any notice, direction or order, the Appeal Unit was required to send a recommendation to the NFAC to initiate penalty proceedings. The new scheme has removed the requirement to send such a recommendation. The Commissioner (Appeals) has been authorized to send a notice to the appellant through the NFAC to initiate any penalty proceedings.
- In the New scheme, the same commissioner (Appeals) who has completed the appeal proceedings is also authorized to initiate penalty proceedings, however, in the erstwhile scheme, NFAC assigns the initiation of penalty proceedings to any RFAC which might be the same or different who conducted the appeal proceedings.
- Under the new Faceless Appeal Scheme, all the orders (appeal order, penalty order, or rectification order) shall be signed digitally by the Commissioner (Appeals) before sending to National Faceless Appeal Centre. There were no such provisions of signing orders digitally by the Appeal Units in the previous scheme.
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Is faceless appeal different from or substitute for appeal to Income Tax ombudsman; which is better?