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September 26, 2022

Request to issue sop to the officers to improve the effectiveness of the video conference proceedings in the faceless regime

by CA Shivam Jaiswal in Circular and Notifications

Request to issue sop to the officers to improve the effectiveness of the video conference proceedings in the faceless regime

To

Smt, Nirmala Sitharaman

Hon. Union Minister of Finance and Corporate Affairs

Government of India

Honble Madam,

SUBJECT: Request to issue SOP to the officers to improve the effectiveness of the Video Conference proceedings in the faceless regime

The Karnataka State Chartered Accountants Association (R) (in short ‘KSCAA’) is an association of Chartered Accountants, registered under the Karnataka Societies Registration Act, in the year 1957. In the past, we have written to your good selves many times populating various issues, challenges and hardships being faced by taxpayers and suggesting possible solutions on the same. Through this representation, we would like to bring to your kind notice, a few practical issues being faced by taxpayers. For every issue, challenge or hardship highlighted, we have also made suggested solutions to address them all.

The adoption of technology by the introduction of faceless measures/ anonymous mode of conducting the proceedings under the provisions of the Income-tax Act. 1961 (the Act) has been a welcome step in promoting transparency in IT proceedings.

This measure has also promoted the government’s vision of ease of doing business. Though certain instances of high-pitched assessments, technical glitches, miscommunications, etc were noticed during the initial days of its implementation, the proactive approach of the Government in addressing the same is much appreciated. Despite the provisions/ scheme being in the nascent stage, many amendments have been made to ensure a taxpayer-friendly system and the same is laudable. One of the primary concerns around the faceless regime is with respect to the principle of natural justice being followed. The principle of audi alterarn parterre, meaning no person shall be judged without a fair hearing, should not be violated under no circumstance. Ensuring that the above principle is followed in the faceless regime is of paramount importance to ensure that there is no miscarriage of justice.

The assessment and penalty proceedings are ongoing and the due date for the same is 30.09.2022. In addition to the same, faceless appeal is an ongoing phenomenon. Since we are at the fag end of the proceedings, we are in receipt of the draft order and also notices for Video Conferencing, wherever requests have been made. Since our representation is with respect to the opportunity of being heard through video conferencing, we deem it appropriate to refer to the provisions dealing with it

Background

1.  Faceless Assessment: Clause (viii) Section 144B(6) of the Act provides “where the request for personal hearing has been received, the income-tax authority of relevant unit shall allow such hearing, through National Faceless Assessment Centre, which shall be conducted exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board”

2. Faceless Appeals: During the pendency of the matter before the Supreme Court in CBDT Vis Lakshya Budhiraja [2021] on a proactive basis the CBDT via Notification dated 28th December 2021, has removed discretionary power for providing a “video hearing”.

The above amendments are a welcome move. However, based on the feedback with respect to the recently concluded VC proceedings, we are of the considered opinion that the opportunity of being heard is frustrating. The conduct of VC proceedings, in most cases, appears to be a mere legal formality and no actual relief or outcome is achieved.

Common grievances with respect to the VC proceedings in the faceless regime

  1. The VC proceedings are scheduled once the Assessee submits a response to the issue of a Show Cause Notice (SCN). In no case, the concerned officer in the Assessment Unit (AO) contests the submissions of the Assessee. There is no proactive approach to understand/resolving the issue/submissions/proposed additions. The proceedings are largely one-sided without any proactive effort on the part of the AO to discuss the contents of the SCN/submissions of the Assessee;
  2. The concerned officer in the Assessment Unit does not switch on their camera and microphones;
  3. When requests are made for VC vide written submissions due to the non-availability of the ‘seek video conference’ option against a notice, the VC option may be granted instead of issuing a fresh notice enabling such an option on the                                               

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