Modification of directions related to faceless schemes and e-proceedings – Budget 2023
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.
2. Consequent to these amendments introduced in the Act, various schemes have been notified and directions issued for implementation of e-proceedings and faceless schemes, as follows:
| Sl. No. | Section | Scheme |
| 1. | 135A | e-Verification Scheme, 2021 |
| 2. | 245MA | e-Dispute Resolution Scheme, 2022 |
| 3. | 245R | e-advance rulings Scheme, 2022 |
| 4. | 250 | Faceless Appeal Scheme, 2021 |
| 5. | 275 | Faceless Penalty Scheme, 2022 |
3. While introducing these amendments in the relevant provisions, time limitations were also incorporated into the statute for issuing directions, with an intent to implement these reforms in a timely manner. These time limits in case of each provision are as below:
| Sl. No. | Section | Scheme |
| 1. | 135A | 31.03.2022 |
| 2. | 245MA | 31.03.2023 |
| 3. | 245R | 31.03.2023 |
| 4. | 250 | 31.03.2022 |
| 5. | 274 | 31.03.2022 |
4. Adjustments may be required to be made to the directions issued under these provisions, in order to overcome any issues arising in their implementation of these schemes and also to ensure that the schemes can operate according to the changing times. However, as per the present provisions, an express power to amend or modify the directions, upon expiry of the relevant time period is not available.
5. Therefore, it is proposed to amend the relevant provisions to provide that where any direction has been issued for the purposes of giving effect to the scheme under that section before the expiry of limitation, i.e., 31st March, 2022 or 31st March, 2023, as the case may be, the Central Government may, amend such direction at any time by notification in the Official Gazette.
6. These amendments will take effect from the last day of April, 2022 for sections 135A, 250 and 274, and for sections 245MA and 245R, these amendments will take effect from the 1st day of April, 2023.
[Clauses 66, 96, 97, 100 & 116]
Extract of relevant clause of Finance Bill 2023
Clause 66 of the Bill seeks to amend the section 135A of the Income-tax Act, 1961 relating to faceless collection of information.
It is proposed to insert a second proviso in the said sub-section (2) of the said section so as to provide that the Central Government may amend any direction issued under the said sub-section on or before 31st March, 2022, by notification in the Official Gazette.
This amendment will take effect retrospectively from 1st April, 2022.
Clause 96 of the Bill seeks to amend the section 245MA of the Income-tax Act, relating to Dispute Resolution Committee.
It is proposed to insert a second proviso in sub-section (4) of the said section so as to provide that the Central Government may amend any direction issued under sub-section (4) of that section on or before 31st March, 2023, by notification in the Official Gazette.
This amendment will take effect from 1st April, 2023.
Clause 97 of the Bill seeks to amend the section 245R of the Income-tax Act relating to procedure on receipt of application.
It is proposed to insert a new proviso in sub-section (10) of the said section so as to provide that the Central Government may amend any direction issued under sub-section (10) of that section on or before 31st March, 2023, by notification in the Official Gazette.
This amendment will take effect from 1st April, 2023.
Clause 100 of the Bill seeks to amend section 250 of the Income-tax Act relating to procedure in appeal.
It is proposed to amend the said section to make the provisions therein applicable to the Joint Commissioner (Appeals) by inserting a reference to the Joint Commissioner (Appeals) wherever the term the Commissioner (Appeals) occurs.
It is further proposed to substitute sub-section (6A) of the said section so as to provide that in every appeal, the Joint Commissioner (Appeals) or the Commissioner (Appeals), as the case may be, where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him under sub-section (1) or transferred to him under sub-section (2) or sub-section (3) of section 246 or filed before him under sub-section (1) of section 246A, as the case may be.
These amendments will take effect from 1st April, 2023.
It is also proposed to insert a second proviso in sub-section (6C) of the said section so as to provide that the Central Government may amend any direction issued under subsection (6C) of that section on or before 31st March, 2022, by notification in the Official Gazette.
This amendment will take effect retrospectively from 1st April, 2022.
Clause 116 of the Bill seeks to amend the section 274 of the Income-tax Act relating to procedure.
It is proposed to insert a second proviso in sub-section (2B) of the said section so as to provide that the Central Government may amend any direction issued under sub-section (2B) of that section on or before 31st March, 2022, by notification in the Official Gazette.
This amendment will take effect retrospectively from 1st April, 2022.
Extract of Relevant Amendment Proposed by Finance Bill, 2023
66. Amendment of section 135A.
In section 135A of the Income-tax Act, in sub-section (2), after the proviso, the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2022, namely:–
“Provided further that the Central Government may amend any direction, issued under this sub-section on or before the 31st day of March, 2022, by notification in the Official Gazette.”.
96. Amendment of section 245MA.
In section 245MA of the Income-tax Act, in sub-section (4), after the proviso, the following proviso shall be inserted, namely:–
“Provided further that the Central Government may amend any direction, issued under this sub-section on or before the 31st day of March, 2023, by notification in the Official Gazette.”.
97. Amendment of section 245R.
In section 245R of the Income-tax Act, in sub-section (10), after the proviso, the following proviso shall be inserted, namely:–
“Provided further that the Central Government may amend any direction, issued under this sub-section on or before the 31st day of March, 2023, by notification in the Official Gazette.”.
100. Amendment of section 250.
In section 250 of the Income-tax Act,–
(a) in sub-sections (1), (3), (4), (5), (6) and (7), for the words and brackets “Commissioner (Appeals)” wherever they occur, the words and brackets “Joint Commissioner (Appeals) or the Commissioner (Appeals)” shall be substituted;
(b) for sub-section (6A), the following sub-section shall be substituted, namely:–
“(6A) In every appeal, the Joint Commissioner (Appeals) or the Commissioner (Appeals), as the case may be, where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him under subsection (1) or transferred to him under sub-section (2) or sub-section (3) of section 246 or filed before him under sub-section (1) of section 246A, as the case may be.”;
(c) in sub-section (6C), after the proviso, the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2022, namely:–
“Provided further that the Central Government may amend any direction, issued under this sub-section on or before the 31st day of March, 2022, by notification in the Official Gazette.”.
116. Amendment of section 274.
In section 274 of the Income-tax Act, in sub-section (2B), after the proviso, the following proviso shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2022, namely:–
“Provided further that the Central Government may amend any direction, issued under this sub-section on or before the 31st day of March, 2022, by notification in the Official Gazette.”.
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