Faceless Assessment
Faceless Assessment
Faceless Assessment
‘Welcome to the New Era of ‘Faceless’, ‘Jurisdiction-less’, ‘Paper-less’ and hopefully ‘Corruption-less’ E-
assessments.”
1) CONCEPT:
a. Basics:
The Faceless Assessment (earlier known as E-assessment) has been rolled out to remove the
human interface between the taxpayer and the Income Tax Department. Transparent Taxation –
Honoring the Honest: For honoring the Honest taxpayers, the Prime Minister Narendra Modi
launched a faceless tax scrutiny and appeal and urged people to pay their due taxes and
contribute to nation building.
The Central Government makes the Faceless Assessment Scheme which was previously named as
the E-assessment Scheme, 2019. This scheme was made vide CBDT Notification S.O. 3264(E) dated
12th September, 2019 as last amended by Notification S.O. 741(E) dated 17th February, 2021.
The Regular Assessments u/s 143(3)/143(3A) being conducted under the New Scheme of e-
Assessments 2019, are more popularly known as ‘Faceless Assessments’ & ‘Jurisdiction-less
Assessments’.
b. Features
Following are main features of Faceless Assessment Scheme for Honoring the Honest:
• Selection of a taxpayer only through system using data analytics and Artificial Intelligence
(AI)
• Automated random allocation of cases
• No physical interface, no need to visit the income tax office
• Dynamic Jurisdiction to Abolition of territorial jurisdiction
• Team based assessments and team-based review
• Central issuance of notices with Document Identification Number (DIN)
• Draft assessment order in one city, review in another city and finalisation in third city.
• 2/3rd of the manpower is utilised for faceless assessment and balance for other
functions.
c. Important provisions
1. Faceless Assessment Scheme (Section 144B of Income Tax Act),
2. Assessment and Re-assessment Provisions (Section 147, 148, 148A , 148B and 149 of Income
Tax Act),
3. Appeals Provisions (Section 158A, Section 158AA, 158AB)
4. Commissioners Revisionary Powers under Section 263 read with Transfer Pricing Order Issued
under Section 92CA of Income Tax Act and lastly
5. Penalty provisions (Section 271AAB, Section 271AAC and Section 271AAD of the Income Tax
Act)
2) FRAMEWORK
The E-Assessment Scheme was mentioned by the Hon’ble Finance Minister in his Budget Speech reported
in (2018) 401 ITR(St.) 1(29) dated 01.02.2018. He stated that E-assessment was introduced in 2016 on a
pilot basis and in 2017, extended it to 102 cities with the objective of reducing the interface between the
department and the taxpayers. With the experience gained so far, they were ready to roll out the E-
assessment across the country, which is expected to transform the age-old assessment procedure of the
income tax department and the manner in which they interact with taxpayers and other stakeholders.
Accordingly, he proposed to amend the Income-tax Act to notify a new scheme for assessment where the
assessment would be done in electronic mode which will almost eliminate person to person contact
leading to greater efficiency and transparency. Accordingly, sections 143(3A), 143(3B) & 143(3C) were
introduced w.e.f. 1.4.2018 where power has been granted to the Central Government to make any
scheme in this regard.
Benefits of E-Assessment:
In the budget speech of 1.2.2018, finance minister had specifically mentioned that there is the right
time to bring in e-assessment. From then i.e., 1.2.2018, the ball started rolling till date i.e., 12.9.2019
where the implementation of such proposal has taken place.
• The notification eliminates person to person to contact.
• Eliminates facetime with Assessing Officers allowing time and energy to be saved.
• Better transparency would be there by way of recording of all communications and documentary
evidences being digitalized.
• Results in greater efficiency since the assessment would be reviewed. In some cases, once at the time
of examination of the draft assessment order and once at the time of assigning the same to a review
unit, which makes the entire process more stable. With multiple internal processes to eliminate
unnecessary scrutiny of cases, much litigation time of assessees and the courts would be avoided.
Even inputs on technical issues of transfer pricing and cross border transactions where expert opinion
could be sought, would be considered.
• No chance of interfering in the process of assessment by any other authority. It is a straight jacket
formula where NEC would conduct the proceedings within the framework laid down by CBDT.
3) Sources
1. TaxGuru.com
2. Faceless Scheme (incometaxindia.gov.in)
3. What is Faceless Assessment scheme 2021? Complete Detail – AUBSP
4. Faceless Assessment – Beginning Of A New Era – Articles (itatonline.org)
5. Practical Guide to Faceless Assessment and Appeals - Kinjal Bhuta - Google Books