Gujarat Chamber of Commerce and industries has made a Representation with respect to Hardships / issues faced by the Assessee/taxpayer after introduction of Faceless Appeal Scheme, which require serious deliberation and consultation and also submitted its suggestions for the same. Full text of the representation is as follows:-
Gujarat Chamber of Commerce and industries
24th August,2022/ 27989
To,
Shri Nitin Gupta
Hon’ble Chairman,
Central Board of Direct Taxes,
Ministry of Finance,
Government of India,
North Block,
New Delhi — 110001
Sub: Representation with respect to issues and disposal of cases under ‘Faceless Appeal Scheme’
Respected Sir,
Background :
With a view to remove the corruption, to bring more transparency and develop faith of taxpayer in judicial system of the country, the CBDT has announced the Faceless Appeal Scheme, 2020 vide notification dated 25th September, 2020. We sincerely appreciate these initiatives taken by the Government introducing paperless/faceless mechanism as a part of Digital India Mission to smoothen the administrative functions on the part of Government as well as for the taxpayers too. Later on, the CBDT has notified the Faceless Appeal Scheme 2021 vide Notification No. 139/2021 applicable w.e.f. 28-12-2021. The new scheme has been notified in supersession of the earlier Faceless Appeal Scheme, 2020.
However, from the date of introduction of Faceless Appeal Scheme, the physical hearing or any kind of physical communication or interaction has been stopped with immediate effect and there is no contact point between the assessee/taxpayer and CIT(Appeals) , National Faceless Appeal Centre (ie. First Appellate Authority) except online portal with very limited mode of communications. With due respect towards Faceless Appeal Scheme, one side the assessee/taxpayer is trying to develop faith in this new judicial system, however at the same time, they are facing various issues due to which, they may have feeling of insecurity and inefficient administration on part of Government.
Hardships / issues faced by the Assessee/taxpayer after introduction of Faceless Appeal Scheme, which require serious deliberation and consultation are mentioned as under :
1. In large number of cases, it is observed that even after passing of 12-18 months from date of filing appeal, the assessee/taxpayer has not received notice fixing the date of hearing / date of filing of written submission. It is undisputed fact that due to introduction Section 148A (new provisions for reopening of assessment) and removal of old provisions for reopening of assessment with effect from 1st April, 2021, the large number of cases were reopened by the Income tax Department in last 24 months, as the same were getting time barred due to introduction of new provisions. In all such cases, against the addition made, the appeal has been filed before National Faceless Appeal Centre except cases of Central Circle.
2. In many cases, the notice u/s 250 of the Income tax Act, 1961 has been issued by CIT (Appeals), National Faceless Appeal Centre under Faceless Appeal Scheme asking to furnish written submission and documents. In such cases, the Assessee has duly complied with by way of filing of written submission along with documentary evidences relied upon. However, no response has been received till the date, neither they have issued any further notice nor have passed the order in the matter even after passing of more than 12-18 months from date of filing of submission.
3. Further in cases, where the assessee has filed Additional evidences under Rule 46A of Income tax Rules, 1962 by way of separate application along with written submission. However even in such cases also, there is no response or update either from the office of the CIT (Appeals), National Faceless Appeal Centre or from the office of the National e-Assessment Centre / the Assessing Officer about Remand Report proceeding or any further proceeding even after passing of more than 12-18 months from date of submission.
4. On the other side, the income Tax department is doing tax recovery and pressing hard to the assessee/taxpayer for the payment of 20% of tax demand. It is also undisputed fact that in almost 70% of cases, the Income Tax Department is making additions on consistent or identical issues carried forward from the earlier years’ scrutiny assessment and out of those 70% cases, more than 40% cases have already been decided in favour of assessee in earlier years by Appellate Authorities, but the addition is being made by the Department just to keep the issue alive. Therefore, the recovery proceeding in such cases just because of Appeal is not deciding by the National Faceless Appeal Centre due to the reasons best known to them and even after passing of more than 12-18 months of filing of submission is totally incorrect and is clearly a unjust enrichment to the assessee/taxpayers.
5. In many cases, it came to notice that though it is specifically requested by the Assessee to the National e-Assessment Centre / the Assessing Officer that the assessee is in appeal in Quantum proceeding and thus penalty proceeding shall keep in abeyance, the Assessing officer without considering submission has levied the penally, against which the assessee is in now in appeal before CIT(Appeal). However till the time, the Quantum proceeding is not be decided by CIT (Appeals) , National Faceless Appeal Centre, it is impossible to decide the penalty matter. On the other side, the Income Tax Department has once again started pressing hard for payment of penalty demand in such scenario.
6. It is also observed that once the notice has been issued by CIT (Appeals) , National Faceless Appeal Centre and against the same, submission filed , even though without considering the submission filed, the another notice is being issued by CIT (Appeals) , National Faceless Appeal Centre asking the same details in same manner without any fresh observation or remark or without asking any new details. This kind of repetition in issuing notices is nothing but waste of time and stationary and other sources of Government, assessee/taxpayer and of tax consultant as well.
7. It is very well on record fact that after introduction of Faceless Appeal Scheme, there is no disposal/ very low rate of disposal cases, which ultimately leads to increase in pendency of cases day by day and will definitely loose the faith of assessee/taxpayer in the judicial as well as administrative system of the Government
Recommendations:
1. The CBDT/ Government shall come up with the mechanism that from date of filing of appeal, the first notice of hearing shall be issued within 3 months asking to file written submission.
2. From the date of filing of submission, the new notice shall be issued within next 30 days if further details/clarification require or shall pass the final order within 45 days from the date of filing of submission.
3. If due to any reason, the order is not being passed within 45 days, the reason shall be communicated to the assessee/taxpayer on regular interval of 15-20 days after expiry of above time limit.
4. The Remand Report shall be called for by National Faceless Appeal Centre within 10 days from date of filing of submission.
5. The Remand Report proceeding shall have been completed and remand report shall be issued and served to the assessee as well as to the National Faceless Appeal Centre within 30 days from the date of documents forwarded by the National Faceless Appeal Centre.
6. One last and final notice shall be issued by the National Faceless Appeal Centre to the assessee/taxpayer asking to submit anything, they want if any, as a final opportunity being heard before passing the final order.
7. The final order has to be passed in any event within 6 months from date of issuing of first notice including the duration of remand report proceeding.
8. The process flow shall be reflected on online portal that shows the appeal status, whether it is under verification stage i.e. verification of written submission or documents or under the stage of remand report proceeding, if any or under final stage of disposal of appeal. The direct tab enables asseessee/taxpayer to ask query in limited words shall make available for smooth functioning and for better clarity of procedure to be undertaken.
9. The High demand cases as well as cases falling under High Pitch Assessment shall be identified and shall take up as Priority matters for speedy disposal.
10. The cases, wherein the Quantum Proceeding is pending and penalty has been levied by the National e-Assessment Centre / the Assessing Officer, the penalty demand shall be stayed automatically and no recovery shall be made towards penalty till the quantum proceeding is not decided by the Appellate Authority.
11. The email id has to be there on notice issued, on which the assessee/taxpayer can file submission /documents on due date, in case of website or portal is not functioning properly.
In view of above discussion, we make a humble request to kindly accept the above recommendations for speedy disposal of cases and smooth administration under Faceless Appeal Scheme in the interest of large number of assessee/taxpayers of the country.
With warm regards,
Pathik Patwari
President
Jainik Vakil
Chairman — Direct Tax Committee
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