Facelesss Assessment Scheme - Features of the Scheme
W.e.f. 13th August 2020, the e-assessment scheme of 2019 is amended to be known as “Facelesss Assessment Scheme”. This Scheme applies to scrutiny and best judgement assessment. This scheme seeks to eliminate the human interface between the taxpayer and the income tax department andwill be carried out through electronic mode.
Salient Features of the Scheme:
The scheme shall work in a manner where draft assessment order in made in one city, review in another city and finalisation in third city.
National e-Assessment Centre (NeAC) is set up at New Delhi.
Regional e-Assessment Centres (ReAC)having 30 headquarters across 20 cities in Delhi, Mumbai, Kolkata and Chennai.
Each of the regional centres, which will have a separate review unit and verification unit, will report to the National e-Assessment Centre (NeAC), that will issue randomized notices of scrutiny.
Exceptions to Faceless Assessment:
Any income tax assessment that includes serious frauds, major tax evasion, sensitive and search matters will not be included in the Scheme
The scheme also excludes International Taxation and Black Money Act & Benami.
Procedure of faceless assessment:
STAGE 1: Issuance of notice to the assesse
(i)National e-Assessment Centre (NeAC) shall serve notice to the assessee u/s143(2) mentioning the issues for selection of taxpayer's case for assessment.
(ii) The assesse may file his/her response with NeAC within 15 days from date notice has been received.
(iii)The taxpayer's case gets assessed under e-assessment only when a taxpayer fails to furnish an income tax return tax return voluntarily or in response to a notice directing a taxpayer to furnish the returns.
STAGE 2: Case to be assigned to the Assessment Unit (AU)
NeAC shall assign the case selected through automated allocation system to an AU in any one ReAC. The AU may request NeAC for following (after allocation of case):-
a) Obtaining such information/document/evidence from the assesseeor any other person
b) Conducting enquiry/verification by the Verification Unit.
c) getting technical assistance from the Technical Unit.
Then, post receipt of request by NeAC for -
- a)obtaining such information/document/ evidence from the assessee or any other person:It shall issue appropriate notice/required to such for information requisitioned by the AU. The assesseemay submit a response to the notice within the time specified in the notice.
- b)conducting of certain enquiry/verification by verification Unit:NeAC shall assign the request to a verification unit through an automated allocation system.
- c)getting technical assistance from the Technical Unit: NeAC shall assign the request to a technical Unit in any one ReAC through an automated allocations system.
The NeAC will send the report it receives from the verification unit or technical unit to the concerned assessment unit.in case a taxpayer fails to response to the notice the NeACwill issue a notice u/s 144 for making a best judgment assessment
The taxpayer can file a response to the notice issued u/s 144. However, if the taxpayer does not file a response, the NeAC will inform the assessment unit,who in the turn will prepare a draft assessment order basis best judgment assessment.
The AU shall, pass a draft assessment order,after taking into account all the relevant material gathered,either accepting the returned income of the assessee or modifying the return income of the assessee, and send a copy of such order to the NeAC.
Stage 3 :Draft Assessment Order
i) NeACin accordance with the risk management strategy specified by board shall examine the draft assessment order, where upon it may decide to-
- a) Finalize the assessment in accordance with draft assessment. Serve an order to the assessment specifying the sum of payable or refund amount only with notice of penalty proceedings, if any;
- b) in the case a Modification is the proposed, provide an opportunity to the assessee by serving a SCN as to why the assessment should not be completed as per draft assessment;
- c) In case of Review, the NeAC can assign the draft assessment order to Review Unit in any ReACthrough an automated allocation system
If NeAC has referred a case to Review unit, RU shall conduct review of the order and may decide to-
- a) Agree with the draft assessment order and intimate the same to NeAC
- b) Suggest any modification, is it me deem fit, to such draft order and send it to NeAC
The NeAC shall, upon receiving concurrence off the review unit, finalize the draft assessment order or provide an opportunity to the taxpayer in case a modification is purpose.
The NeAC shall, upon receiving suggestions for modification from the review unit communicate the same to the assessment unit.
The assessment unit shall, after considering the modifications by the review unit, send the final draft assessment order to the NeAC.
The NeACshall, upon receiving final draft assessment order, finalise the draft assessment order, or provide an opportunity to the taxpayer in case of modification is purpose, as the case may be.
The taxpayer may, in a case where notice is issued for making submission against the draft assessment order, furnish his response on the NeAC on or before the date and time specified in the notice.
The NeAC shall:
- i) In the case where no response to the show-cause notice is received, finalise the assessment as per the draft assessment order; or
- ii) in any other case, send the response received from the taxpayer to the assessment unit: The assessment unit shall, after taking into account the response furnished by the taxpayer, make a reviseddraft assessment order and send it to the NeAC.
Stage4 :Final order and Completion of Assessment
The NeAC sell pass the order depending upon such revised order as received from the AU. In case the modification is prejudicial to the interest of assesse,an opportunity will be provided to the assesse before passing the order.
The NeAC shall after completing of assessment, transfer all the electronic recording of the case to assessment officer having jurisdiction over such case for: -
- Imposition of penalty
- Collection and recovery of demand
- Rectification of mistake
- Giving effect to appellate orders
- Submitting report to be produced before commissioner (Appeals) /Tribunal/courts as the case may be
- Proposal seeking sanction for lunch of prosecution and filing of complaint before the court
The NeAC may at any stage of the assessment, if considerate necessary transfer the case to the assessing officer having jurisdiction over such case.
- Any unit may, in cause of assessment proceeding for non-compliance of any notice, direction or order issued under this scheme on the part of the assessee or any other person, send recommendation to the NeACfor initiation of penalty proceedings under the income tax Act, against such assessee or any other person, as the case may be.
- The NeAC Shell, on receipt of such recommendation,serve a notice on the assessee or any other person, as the case may be, calling upon him to show case as to why penalty should not be imposed under the Income Tax Act.
- The response to SCNshall be forwarded by the NeAC to the concerned unit which has made the recommendation for penalty
- The said unit shall, after taking into consideration the response furnished by the assesse or any other person, as the case may be: make a draft order of penalty and send a copy of such draft to NeAC; or Drop the penalty after recording reason, under intimation to the NeAC
- The NeACshall levy the penalty as per the said draft order of penalty and serve a copy of the same along with a notice for demand on the taxpayer or any other person, as the case may be, as only transfer the records of penalty proceeding to the jurisdiction assessing officer for further action.
Procedure for appeal:
An appeal against an assessment order or penalty order made by the NeAC can be filed before the Commissioner(Appeals) having jurisdiction over the jurisdictional assessing officer.
Communication and electronic record:
- a) All communication between the NeAC and the taxpayer, or his authorizedrepresentative, shall be exchanged exclusively by electronic mode.
- b) All internal communications between the NeAC, ReAC and various units shall be exchange exclusively by electronic mode.
However, the electronic exchange of communication is not applicable where the verification unit approves a personal hearing.
All the electronic recording issued under the scream shall be authenticated byNeAC by affixing digital signature or by the taxpayer or any other person by affixing their Digital Signature or through any EVC
Every notice or order or any other Electronic Communication under this scheme shall be delivered to the taxpayer by my way of:
- Putting an authenticated copy of the communication in the registered account of the taxpayer
- Sending an authenticated copy thereof the registered email
- Uploading a copy on theassessee's mobile app
Under the Faceless Assessment Scheme,the taxpayer shall file his response to any notice or order or any other Electronic Communication, through his registered account. The response shall be deemed to be authenticated, once an acknowledgement is sent by NeAC upon successful submission of response.