Faceless Appeal Scheme, 2020 under Income Tax Act 1961. was notified by the Ministry of Finance on 25th. September 2020. To empower the income tax department in conducting faceless assessments till the disposal of faceless Appeals the Government is taking various initiatives/steps by changing the existing processes/procedures via a continuous series of notifications and office orders. The recent one is a notification regarding filing and disposal of faceless appeals filed under section 246A (1) and section 248 of the Income Tax Act 1961. The notification is divided under following main heads:
1. Short title and commencement.
3. Scope of the Scheme
4. Faceless Appeal Centres.
5. Procedure in Appeal.
6. Penalty Proceedings.
7. Rectification Proceedings.
8. Appellate Proceedings
9. Exchange of communication exclusively by electronic mode.
Authentication of electronic records.
Delivery of electronic record.
No personal appearance in the centers or Units
Power to specify format, mode, procedure, and process.
Since it is not prudent/possible to convert the full notification into one article let us concentrate on point numbers 3,4 and 5 to make things simple and easy to understand.
1. Scope of Scheme: The Board has been authorized to specify scheme as to how to appeal shall be disposed of with respect to a particular territorial area or persons or class of persons or incomes or class of incomes or cases or class of cases. In the coming days, we may see the Board issuing certain clarification about how appeals shall be disposed of by issuing orders/circulars.
2. Faceless Appeal Centres. The whole process of the disposal of appeals has been divided into three units by creating three-tier compartments starting from 1. National Faceless Appeal Centre 2. Regional Faceless Appeal Centres and 3. Appeal units. The most important fact is that these three centers/units will not work independently but will be inter-dependent on each other.
The job concerning the process of appeals under the faceless scheme has been divided as Under:
1. National Faceless Appeal Centre: will be responsible for the conduct of e-appeal proceedings in a centralized manner, which shall be vested with the jurisdiction to dispose of the appeal as per the provisions of the faceless appeal scheme.
2. Regional Faceless Appeal Centre: will be responsible to facilitate the conduct of e-appeal proceedings, as it deems necessary, which shall be vested with the jurisdiction to dispose of the appeal in line with the provisions of the faceless appeal scheme.
3. Appeal units: the job of this unit is to conduct the proceedings, as it may deem fit, perform the functions of disposing of an appeal, starting from admitting additional grounds of appeal, making such inquiries as it may deem fit, seeking information or clarification on admitted grounds of appeal, providing the opportunity of being heard to the appellant, analyzing of materials furnished by the appellant, review of the draft order, and such other functions as may be required for the purposes of this scheme: Except laying down guidelines or making changes in the process of disposing appeals and being a conduit for establishing communication between the appellant and the appeal unit the responsibility of conducting the job to actually dispose of an appeal lies with appeal unit. The appeal must be filed with the National faceless center which will be assigned to an Appeal unit for disposal. It will be the job of the appeal unit to decide whether the appeal has been filed within the time prescribed under the law, in case of delay in filing of appeal whether the cause of delay was genuine after examining the documentary evidence submitted. In case the appeal unit concludes that the reasons for the cause of delay are not satisfactory they may dismiss the appeal and reject its admission. The job of the appeal unit is most critical in the whole process as the responsibility to admit or reject an appeal based on the documents submitted or granting or rejecting exemption to an appellant under section 249, subsection (4), clause (b) lies with this unit under intimation to National Faceless Appeal Centre.
Once the appeal is admitted and the process of disposal of appeal is put into motion the appeal unit can ask from the National Faceless Appeal Centre to provide the following information:
1. To obtain further information, document, or evidence from the appellant or any person, as it may specify.
2. To obtain a report from National e-Assessment Centre or the Assessing Officer, as the case may be, on the grounds of appeal or information, document, or evidence filed by the appellant.
3. Request for directions to National e-Assessment Centre or the Assessing Officer, as the case may be, for making a further inquiry under sub-section (4) of section 250 of the Act and submit a report thereof.
4. The Job of the National Faceless Appeal Centre will be to serve notice upon Appellant, National e-processing Centre and or the assessing officer, as the case may be, to submit their replies and /or documents and/ or report as desired by the Appeal unit mentioned at point number 1,2 & 3 above by or before a specified date and time.
Once the documents, replies, or reports are submitted by those who were served notice by the National Faceless Appeal Centre the same will be forwarded to the concerned Appeal Unit for their consumption. The Appellant is free to file additional arguments/submissions to substantiate the grounds of appeal to the National Faceless Appeal Centre in the form as specified. On receipt of the additional arguments/submissions, the same will be examined by the Appeal unit to decide whether the additional arguments/submissions are worth taking on record or need to be rejected. The appeal unit will inform the National Faceless Appeal Centre about the decision which will be communicated to the Appellant.
The whole process of the disposal of Appeal will be dealt with as per the provisions of the Income Tax Act and the procedure to be adopted as per the guidelines of the Faceless Appeal notification and circulars, if any, issued by the Board or authorized concerned authorities.
The most important role in the process of disposal of faceless Appeals will remain with the Faceless Appeal unit as such units will be doing the evaluations of the case papers based on the facts of the cases and the point of law before reaching a stage where an order can be drafted, subject to review before finalizing the order, to conclude the proceedings and the appeal can be disposed of. The Faceless Appeal unit will be interacting with the Faceless National Appeal center for all its requirements from the issuance of a notice, submission of additional documents, evidence, reports, or assessment summaries from Appellant, National e-Assessment Centre, and or the Assessing officer till serving the final order to the concerned parties once the case is disposed and closed.
It is difficult to summaries the whole process of Faceless Appeal Scheme 2020 in few words but the idea of producing this article was to have an idea as to how the new Faceless Appeal is expected to work.