Faceless Assessments and Appeals

The Central Government, on August 13, 2020, has extended the Faceless Assessment Scheme, 2020 (‘FAS’) to all pending tax assessments, excluding proceedings assigned to the Central Charges or International Tax Charges of the Income Tax Department. The Government has also specified detailed guidelines and procedures for implementation of the FAS through a National e-Assessment Centre (‘NeAC’) and a network of Regional e-Assessment Centres (‘ReAC’). The ReAC network conducts the assessment, verification and review of matters, while the NeAC will act as the gateway for the flow of information to and from tax payers and third parties. No physical meetings will be conducted between taxpayers and officers, and all functions will be through electronic means. However, if a request for a personal hearing is made by the assessee, the same may be conducted through video conferencing.

The Central Government has also announced the Faceless Appeal Scheme, 2020 on September 25, 2020 (‘FApS’) for the disposal of income tax appeals before the Commissioner (Appeals), in a faceless manner with the exception of appeals relating to serious fraud, major tax evasion, sensitive and search matters, matters relating to international tax and matters under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The FApS will be implemented through a National Faceless Appellate Centre (‘NFAC’) and a network of Regional Faceless Appellate Centres (‘RFAC’). The scheme contemplates the electronic allocation of appeals, communication of notice/questionnaires, verification and enquiry as well as electronic hearing and communication of appellate orders. The entire appellate process will be online, dispensing with the need for physical interfacing between the appellant and the department.

Further, the Government, through the Amending Act, has modified various provisions of the ITA to enable notification of similar schemes for transfer pricing proceedings, collection of information and inspection, auditing of accounts and valuations, initiation and sanctioning of reassessment proceedings for income escaping assessment, rectifications, revisions etc., to be conducted in a faceless manner.