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Delhi HC set aside order passed by AO as no personal hearing was granted to assessee

Delhi HC set aside order passed by AO as no personal hearing was granted to assessee

Fact and Issue of the case

Present writ petition has been filed challenging the assessment order dated 20th May 2021 issued by Respondent Nos. 1 to 6 under Section 143(3) read with Section 144B of the Income Tax Act, 1961 [for short ‘the Act’] for Assessment Year 2018-2019 and notice of demand dated 20th May, 2021. Petitioner also challenges the show cause notice and draft assessment order both dated 19th April, 2021, penalty notice dated 20th May, 2021 under Section 274 read with Section 271AAC(1) of the Act issued by Respondents.

Observation of the court

The learned Predecessor Division Bench in Sanjay Aggarwal v. National Faceless Assessment Centre Delhi in W.P. (C) 5741/2021, while interpreting aforesaid section has held as under:-

“11.4. A careful perusal of clause (vii) of Section 144B (7) would show that liberty has been given to the assessee, if his/her income is varied, to seek a personal hearing in the matter. Therefore, the usage of the word ‘may’, to our minds, cannot absolve the respondent/revenue from the obligation cast upon it, to consider the request made for grant of personal hearing. Besides this, under sub-clause (h) of Section 144B (7)(xii) read with Section 144B (7) (viii), the respondent/revenue has been given the power to frame standards, procedures and processes for approving the request made for according personal hearing to an assessee who makes a request qua the same.

11.5. In several matters, we have asked the counsels for the revenue as to, whether any standards, procedures and processes have been framed for dealing with such requests. The response, which we have got from the standing counsels including Mr. Chandra, is that, to the best of their knowledge, no such standards, procedures as also processes have been framed, as yet.

12. Therefore, in our view, given the aforesaid facts and circumstances, it was incumbent upon the respondent/revenue to accord a personal hearing to the petitioner. As noted above, several requests had been made for personal hearing by the petitioner, none of which were dealt with by the respondent/revenue.

12.1. The net impact of this infraction would be that, the impugned orders will have to be set aside. It is ordered accordingly.”

Keeping in view the aforesaid facts and mandates of law, the impugned assessment order dated 20th May, 2021 as well as notice of demand and penalty notice are set aside and the matter is remanded back to the Assessing Officer, who shall grant an opportunity of hearing to the petitioner by way of a Video Conferencing and thereafter pass a reasoned order in accordance with law.

With the aforesaid direction, the present writ petition along with pending applications stand disposed of.

Conclusion

The court ruled in favour of the assessee and disposed off the petition

Read the full order from below

Delhi-HC-set-aside-order-passed-by-AO-as-no-personal-hearing-was-granted-to-assessee

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CBIC has laid down the Procedure to Roll out of All India Faceless Assessment of Import of Goods by Oct 31, 2020

CBIC has laid down the Procedure to Roll out of All India Faceless Assessment of Import of Goods by Oct 31, 2020

All India roll-out of Faceless Assessment

1. Kind reference is invited to Board Circulars No.28/2020-Customs, dated 05.06.2020 and No. 34/2020-Customs, dated 30.07.2020, launching Phases I and II of Faceless Assessment, respectively, under the umbrella of the next generational Turant Customs programme.

2. The key elements of the Turant Customs programme are Faceless, Contactless and Paperless Customs clearance processes. This includes faceless or anonymised assessment, self-registration of goods by importers, automated clearances of bills of entry, digitisation of Customs documents, etc.

The objectives sought to be achieved are exponentially faster clearance of goods, reduced interface between trade and Customs officers and enhanced ease of doing business. The phased launch of the Turant Customs programme in select ports of import was aimed at testing in a real-life environment, the IT capabilities as well as the responsiveness of the trade and Customs officers to the various initiatives.

The results have been reviewed and these have confirmed that the stated objectives are being met. The stage is now set for extending the Turant Customs programme across all Customs ports pan India and thereby ushering in a more modern, efficient, and professional Customs administration with resultant benefits for trade and industry.

3. Faceless Assessment, duly supported by Paperless and Contactless Customs clearance processes, is a critical reform. As you are aware, the pilot programme of Faceless Assessment was launched in Chennai on 14.08.2019 for primarily electrical machineries falling under Chapter 85 of the Customs Tariff Act,1975.

This pilot programme was subsequently expanded to Ahmedabad, Bengaluru, Delhi, Mundra and Visakhapatnam for goods primarily falling under Chapters 39, 84, 86 to 92, 72 to 83 and 50 to 71 of the Customs Tariff Act, 1975. These pilot programmes helped test Faceless Assessment, first in the same Zone (e.g. imports at Chennai seaport and air-cargo were assessed by Customs officers in either location instead of only in the port/air-cargo of import) and then across Zones (e.g. imports at Chennai sea/air-cargo were assessed by Customs officers at Bengaluru air-cargo/ICD and vice versa).

These pilot programmes were followed by the launch of Phase I of Faceless Assessment on 05.06.2020, cutting across the Customs formations in Chennai and Bengaluru for articles primarily falling under the Chapters 84 and 85 of the Customs Tariff Act, 1975. Phase II of Faceless  Assessment, which was begun on 03.08.2020 at Customs formations in Chennai, Bengaluru, Delhi, for goods falling under the Chapters 50 to 71, 84, 85 and 86 to 92 of the Customs Tariff Act, 1975 and at Customs formations in Mumbai, for goods failing under the Chapter 29 of the Customs Tariff Act, 1975. As aforestated, the results have been encouraging.

4. Board has decided to roll-out the Faceless Assessment at an All India level in all ports of import and for all imported goods by 31.10.2020. The detailed roll-out plan in phases covering different Customs Zones and Chapters of the Customs Tariff Act, 1975, including the existing Phases I and II, is given in Annexure I.

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Constitution of National Assessment Centres (NACs) :

5.1 Vide para 4 of Circular No.28/2020-Customs, dated 05.06.2020, it was intimated that the designated nodal Commissioners would be precursors to the National Assessment Centres (NACs). Accordingly, Board has decided to constitute total 11 NACs, as mentioned in the Annexure II. These NACs are organized commodity-wise according to the First Schedule to the Customs Tariff Act, 1975. The rationale for the selection of a Zone in the NAC is the share of volume of the import of the particular commodity group(s) in its Zone as compared to the All India imports and/or share of contributed by the said commodity group(s) or the share of import of the particular commodity group(s) in their own Zones, while the rationale for the selection of a Conveners for the NAC is its share of the All India revenue contributed by the said commodity group(s) or the share of the revenue contributed by the particular commodity group(s) in their own Zones.

5.2 Each NAC shall be co-convened by the Principal Chief Commissioners/Chief Commissioners of the Zones mentioned in Column 4 of Annexure II.

5.3 Each NAC shall consist of the Principal Commissioners/ Commissioners of Customs from the Zones indicated in Column 3 of Annexure II as a member.

5.4 For each NAC the Principal Chief Commissioners/ Chief Commissioners, having jurisdiction over the Zones, shall nominate a nodal Principal Commissioners/ Commissioners. The rationale for the nomination would be the volume of the import of the particular commodity group(s) in the Zone as compared to the All India imports and/or share of import of the particular commodity group(s) in their own Zones. The Board shall be informed about the nomination of the Principal Commissioners/ Commissioners and the same shall be published on the departmental website.

Responsibilities of NAC:

5.5 The NACs have a critical role in the successful implementation of Faceless Assessment. In addition to their existing work, the NACs need to work in a coordinated manner to ensure that all assessments are carried out in a timely manner and there is no delay or hold up of the Bills of Entry. The NACs would also examine the assessment practices of imported goods across Customs stations to bring about uniformity and enhanced quality of assessments. The important responsibilities of the NACs shall include the following:

I. Monitor the assessment practice for enhancing uniformity of classification, valuation, exemption benefit and compliance with import policy conditions.

II. Assess the application of Compulsory Compliance Requirements (CCRs) and ensure uniform practices in accordance with the relevant statutes/Legal provisions.

III. Study audit objections and take corrective actions regarding assessments, wherever necessary and provide inputs to the concerned ports of import.

IV. Analyse the RMS facilitated Bills of Entry pertaining to Chapters falling under their purview and advise the DGARM regarding possible interventions or review of risk parameters.

V. Liaise with Principal Commissioner/Commissioner of Customs at ports of import about interpretational issues pertaining to classification, valuation, scope of exemption notifications and trade policy conditions.

 VI. Interact with sectoral trade and industry for inputs, and on issues relating to assessment.

VII. Function as a knowledge hub or repository for that particular Chapter(s);

VIII. Examine the orders/appellate orders in relation to assessment practices pertaining to goods assigned to each Faceless Assessment Group and provide inputs to the Commissionerates for uniformity of assessment orders before legal fora.

IX. Constitute Working Groups for matters relating to:

a) Monitoring for timely assessment of Bills of Entry

b) Valuation and related issues

c) Classification and related issues

d) Restrictions and prohibitions and Co-ordination with PGAs

e) Communication and Outreach for departmental officers and trade

f) Any other matter relevant to timely and uniform assessment, as may be decided.

Responsibilities of Co-conveners of NAC:

5.6 The Co-conveners of NAC shall provide overall leadership and monitor the functioning of the NACs. The important responsibilities of NAC Co-conveners in regard to the NAC shall include the following:

I. Nomination of Principal Commissioners/ Commissioners as Members of the NAC from the Zones mentioned in column 3 of Annexure II.

II. Ensure setting up of Working Groups within NACs for smooth functioning of NACs.

III. Ensure that NACs develop expertise over the assigned Faceless Assessment Group in different facets of assessment such as classification, valuation, prohibitions & restrictions etc.

IV. Co-ordinate with other Directorates and NACs for various functions mentioned in paras 5.7 & 5.8 of this Circular.

V. Make recommendations to Board for policy considerations.

Co-ordination Among NAC Commissioners:

5.7 Since the Nodal Principal Commissioners/ Commissioners are spread across different geographical locations, following co-ordination measures may be institutionalised at the initial phase, which will go a long way in bringing efficiency to the functioning of NACs:

I. Continuous assessment – Ensure that verification of the assessment is not held up if there is an official holiday for the members of the FAG in a particular location. This could be done by having this work done at multiple locations.

II. Daily Web meeting – The Working Groups may virtually meet for a short duration every day at a scheduled time to review timeliness of assessment, identify bottlenecks and take measures to remove difficulties. The link shall be made available to the Chairman, Member Customs, Zonal Member(s) and Joint Secretary (Customs), CBIC and the Co-convenors of concerned NAC, to enable participation in the online meeting room.

III. Weekly web meeting – The Working Groups may have a web meeting for a short duration once a week at a scheduled time to review classification, valuation, exemption notifications, prohibitions and restrictions in order to identify divergent practices and ensure uniformity.

IV. Monthly web meeting by Co-convenors: The Co-convenors of the NAC shall have a web meeting, at least once in a month to review the functioning of the NACs.

Co-ordination of NACs with Other Directorates:

5.8 NACs shall also co-ordinate with:

I. Directorate of Revenue Intelligence (DRI) and Directorate General of GST Intelligence (DGGI) related to management of alerts undertaken by the NAC.

II. Directorate General of Valuation (DGoV) to enhance expertise related to sensitive commodities handled. DGoV shall also appoint nodal person for every NAC for better co-ordination.

III. Directorate General of Analytics and Risk Management (DGARM) to provide feedback and enhance risk assessment and accuracy of CCR Instructions.

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IV. National Academy of Customs and Indirect Taxes (NACIN) to hold capacity building sessions for departmental officers.

V. Directorate General of Taxpayer Services (DGTS) to enhance outreach measures to the taxpayers by providing content, faculty for holding webinars, workshops etc.

VI. Directorate General of Audit (DG Audit) and Audit Commissionerates related to audit objections and feedback.

VII. Directorate General of Systems and Data Management (DG Systems) in regard to System issues and enhancements.

VIII. Any other formations in CBIC to fulfil the stated objectives.

Pre-launch preparation for Faceless Assessment:

Before the rollout of Faceless Assessment, the Nodal Commissioners in the NAC shall co-ordinate to take all measures to ensure that Faceless Assessment is smooth and creates no disruption in the assessment and clearance of goods. The following important measures may be undertaken by the NAC before the launch:

I. The Customs locations within each Zone, performing Faceless Assessment may be identified. The volume of import and availability of adequate officers may be taken into consideration for such identification.

II. Nominate sufficient number of officers for the Faceless Assessment. The officers should be more than two at all levels, to ensure availability. To the extent  possible, dedicated team of officers may be posted to the Faceless Assessment Groups.

III. Identify variations, if any, in assessment practices and harmonise them for application across FAGs.

IV. Take into account audit objections, judicial and quasi-judicial decisions accepted by the Department relating to the assessment of the goods to be handled by the Faceless Assessment Groups under the concerned NAC and circulate among the FAGs for uniformity of assessment.

V. Organize training on roles and functionalities in ICES related to Faceless Assessment including MIS Reports and Dashboards.

5.10. To ensure smooth implementation of Faceless Assessment & to sensitize both the departmental officers and the trade, Directorate General of Taxpayer Services (DGTS) in coordination with Customs Policy Wing shall organize extensive outreaches via online webinars/ promotional videos etc.

6. Conference on Tariff & Other Customs Matters:

6.1 Joint Secretary, Customs, (CBIC) would be responsible for coordinating with the NACs in organizing a Conference on Tariff & Other Customs Matters every 6 months to review the functioning of the NACs and FAGs. The Conference would be chaired by Member (Customs).

7.  Further, Board has issued Notification No.85/2020-Customs (N.T.) dated 04.09.2020 by virtue of which the Commissioners of Customs (Appeals) are empowered take up appeals filed in respect of Faceless Assessments pertaining to imports made in their jurisdictions even though the Faceless Assessment officer may be located at any other Customs station. To illustrate, Commissioners of Customs (Appeals) at Bengaluru would decide appeals filed for imports at Bengaluru though the Faceless Assessment officer is located at any other port of the country, say Delhi.

8. All other clarifications and guidelines on Faceless Assessment, as provided vide Circular No.28/2020-Customs and Instruction No.09/2020-Customs, both dated 05.06.2020 may kindly  be referred to.

9. The Principal Chief Commissioners/Chief Commissioners of Customs are requested to issue Public Notices and guide the trade suitably to ensure the smooth roll out of Faceless Assessment.

10. Any difficulties faced in the implementation of this Circular may please be brought to the notice of Board.

Annexure I

Implementation Phases for All India Roll-Out of Faceless Assessment

PhaseRoll-Out Date% Coverage of All India Bills of EntryFaceless Assessment Group ClustersZones and Faceless Assessment Groups
(1)(2)(3)(4)(5)
I05.06.202014 %  5 & 5A – Bengaluru & Chennai  Bengaluru – 5, 5AChennai – 5, 5A
II03.08.202021%  3,5,5A,5B – Bengaluru, Chennai & Delhi   Mumbai I,II,III – 2A  3, 5, 5A, 5B – Bengaluru3, 5, 5A, 5B – Chennai3, 5, 5A, 5B – Delhi2A – Mumbai I, II , III
III15.09.202050 %  5,5A,5B – Ahmedabad, Bengaluru, Chennai, Delhi, Mumbai I, II & III, Visakhapatnam   4 – Ahmedabad, Bengaluru, Bhubaneshwar, Chennai, Delhi, Visakhapatnam   3 – Bengaluru, Chennai & Delhi, Delhi (Prev.), Kolkata, Thiruvananthapuram, Tiruchirappalli (Prev.), Patna (Prev.), Guwahati   2G – Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Meerut and Nagpur, Pune   2A – Mumbai I, II, III, Chennai and Hyderabad  2A,5, 5A, 5B – Mumbai I, II, III2A – Hyderabad2G, 4, 5, 5A, 5B – Ahmedabad2G, 3, 4, 5, 5A, 5B – Bengaluru (e) 2G, 2A 3, 4, 5, 5A, 5B – Chennai (f) 2G, 3, 4, 5, 5A, 5B – Delhi 2G – Bhopal, Meerut, Nagpur, Pune 3 – Delhi (Prev.), Kolkata, Patna (Prev.), Guwahati, Thiruvananthapuram, Tiruchirappalli (Prev.)4 – Bhubaneshwar4,5, 5A, 5B – Visakhapatnam
IV01.10.202086.0%  5,5A,5B – Ahmedabad, Bengaluru, Bhopal, Bhubaneshwar, Chennai, Delhi, Guwahati, Hyderabad, Kolkata, Delhi (Prev.), Meerut,Mumbai I, II & III, Nagpur, Patna (Prev.), Pune, Thiruvananthapuram, Tiruchirappalli (Prev.), Visakhapatnam   4 – Ahmedabad, Bengaluru, Bhubaneshwar, Bhopal, Chennai, Delhi, Delhi (Prev.), Kolkata, Meerut, Mumbai I, II,III, Nagpur, Pune, Visakhapatnam, Hyderabad   3 – Ahmedabad, Bengaluru, Visakhapatnam   2G – Ahmedabad, Bengaluru, Bhopal, Bhubaneshwar, Chennai, Delhi, Delhi (Prev.), Guwahati, Hyderabad, Kolkata, Meerut, Mumbai I, II & III, Nagpur, Patna (Prev.), Pune, Thiruvananthapuram, Tiruchirappalli (Prev.), Visakhapatnam   2A – Ahmedabad, Bengaluru, Bhopal, Bhubaneshwar, Chennai, Delhi, Delhi (Prev.), Guwahati, Hyderabad, Kolkata, Meerut, Mumbai I, II, III, Nagpur, Patna (Prev.), Pune, Thiruvananthapuram, Tiruchirappalli (Prev.), Visakhapatnam   1A – Ahmedabad, Bengaluru, Bhopal, Bhubaneshwar, Chennai, Delhi, Delhi (Prev.), Guwahati, Hyderabad, Kolkata, Meerut, Mumbai I, Mumbai II & III, Nagpur, Patna (Prev.), Pune, Thiruvananthapuram, Tiruchirappalli (Prev.), Visakhapatnam   1,6 – Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Delhi (Prev.), Guwahati, Hyderabad, Kolkata, Meerut, Mumbai I, II & III,  (a) 1,2A, 2G, 2K, 3, 4, 5, 5A, 5B, 6 – Mumbai -II (b) 1,1A, 2G, 2A, 3, 4, 5, 5A, 5B, 6 – Chennai (c) 1A, 2A, 2G, 3, 4, 5, 5A, 5B, 6 – Mumbai-I (d) 2A, 2G, 3, 4, 5, 5A, 5B – Mumbai-III (e) 2A, 4, 5, 5A, 5B – Hyderabad (c) 1A, 2A, 2G, 2K, 3, 4, 5, 5A, 5B – Ahmedabad (d) 1A, 2A, 2G, 3, 4, 5, 5A, 5B – Bengaluru (f) 2A, 2G, 3, 4, 5, 5A, 5B, 6 – Delhi (g) 2G, 4, 5, 5A, 5B – Meerut, Nagpur, Bhopal, Pune (h)1, 3, 4, 5, 5A, 5B – Kolkata (i) 3, 4, 5, 5A, 5B – Delhi (Prev.) (h)1, 1A, 2, 2A, 2B, 2C, 2D, 2E, 2F, 2G, 2H, 2I, 2J, 2K, 3, 4, 5, 5A, 5B, 6 Kolkata (i) 1, 1A, 2, 2A, 2B, 2C, 2D, 2E, 2F, 2G, 2H, 2I, 2J, 2K, 3, 4, 5, 5A, 5B, 6– Delhi (Prev.) (j) 1, 1A, 2, 2A, 2B, 2C, 2D, 2E, 2F, 2G, 2H, 2I, 2J, 2K, 3, 4, 5, 5A, 5B, 6– Thiruvananthapuram, Tiruchirappalli (Prev.) (k) 1, 1A, 2, 2A, 2B, 2C, 2D, 2E, 2F, 2G, 2H, 2I, 2J, 2K, 3, 4, 5, 5A, 5B,6 – Visakhapatnam (l) 1, 1A, 2, 2A, 2B, 2C, 2D, 2E, 2F, 2G, 2H, 2I, 2J, 2K, 3, 4, 5, 5A, 5B, 6– Bhubaneshwar (m) 1, 1A, 2, 2A, 2B, 2C, 2D, 2E, 2F, 2G, 2H, 2I, 2J, 2K, 3, 4, 5, 5A, 5B, 6– – Patna (Prev.), Guwahati

31st Oct 2020: All India – All Zones – All Imports under Faceless Assessment#

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Faceless Assessment Scheme, a right step towards Minimum Government, Maximum Governance: Chief Commissioner – IT Mumbai

Faceless E-Assessment scheme is a right step towards Minimum Government, Maximum Governance and the foundation stone for a transparent tax system. This is how Principal Chief Commissioner of Income Tax in Mumbai, Shri Patanjali Jha summarizes the new platform of Income Tax Department.

He added that providing Ease of Tax Compliance and Opportunity to taxpayers before finalizing of Assessment Order are the core features of this scheme, while speaking at a webinar on ‘Faceless Assessment, Appeals & Taxpayer’s Charter’ jointly organized by the IMC Chamber of Commerce & Industry and Bombay Chamber of Commerce & Industry.

Making a comparison between the faceless assessment system and the current system it replaces, the Principal Chief Commissioner explained how the new system is one designed for the 21st century. “There is no discretion in selection of assessment cases, while earlier, case selection used to happen manually.

In place of single territorial jurisdiction, we now have automated random allocation of cases. While notices used to be issued both manually and on the system, issue of notices will now be done through a central mechanism (by NeAC) in electronic mode.

There will be no physical meeting with any officer, no officer will call you to office and no more waiting outside office”, explained Shri Jha. He also noted, wide discretion and subjective assessment are being replaced by team-based assessment and a system wherein draft order is issued in one city, review is done in another city and finalization is done in yet another city, said the Principal Chief Commissioner.

This apart, the scheme gives opportunity to taxpayers, in case of any order prejudicial before finalizing the Assessment order.

The Principal Chief Commissioner urged all taxpayers to visit the e-filing portal to understand how easy it is to use the platform from where all issues with the Department can be resolved easily. “On our part we expect you to understand and try to adapt; We will also provide suitable infrastructure facilities and ensure tax compliance is easy for tax payers”, stated Shri Jha

A National e-Assessment Centre (NeAC) and a network of Regional e-Assessment Centres will be set up to implement the Faceless Assessment Scheme of the Income Tax Department, launched nation-wide by Prime Minister Shri Narendra Modi on 13th August, 2020.

The regional assessment network would comprise assessment units, verification units, technical units and review units. The system allows for dynamic jurisdiction, team-based working, and functional specialization and does away with human interface altogether.

The Chief Commissioner of Income-Tax (ReAC) Mumbai, Smt. Lekha Kumar and Principal Commissioner of Income-Tax, Mumbai, Shri. Kaushal Shrivastava also addressed the participants and responded to their queries.

Faceless Assessment Scheme was rolled out in the Income Tax Department as a pilot project in September, 2019. Initially, a limited number of cases were picked up for faceless assessment which was being done at eight centres in the country.

The Prime Minister of India, Shri Narendra Modi announced the extension of the scheme to the entire department on 13th August 2020. The scheme is also being extended to the first appellate authority i.e. Commissioner of Income Tax (Appeals) from 25th September, 2020.

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Step wise process for Faceless Assessment, scope extended to cover best judgement assessment- CBDT

Step wise process for Faceless Assessment, scope extended to cover best judgement assessment- CBDT

Introduction

Promoting a transparent and fair tax regime, Prime Minister Narendra Modi on 13th August, 2020 unveiled ‘taxpayers’ charter’ on Thursday, enshrining rights of assesses in a statute under the Income tax law. With the launch of ‘Transparent Taxation — Honoring the Honest’ platform, Modi also unveiled faceless appeal and expanded the scope of faceless assessment, eliminating physical interface between taxpayers and tax authority.

The Central Board of Direct Taxes (CBDT) has revised the ‘E-assessment Scheme, 2019’ notified on September 12, 2019. Now, e-assessment scheme shall be called Faceless Assessment.

The National e-Assessment Centre shall intimate the assessee for conduct of faceless assessment in case wherein notice has been issued by AO. The Board has also extended its scope to cover best judgment assessments.

What was the E-assessment Scheme, 2019?

Finance Minister Nirmala Sitharaman had announced the e-assessment scheme in her Budget speech on July 5, 2019, which was subsequently inaugurated on October 7, 2019.

This was aimed at moving to faceless scrutiny and elimination of human interface in assessment proceedings. The scheme was set to bring in a “paradigm shift” in taxation by eliminating human interface in the income tax assessment system.

The Ministry of Finance vide Central Board of Direct Taxes (CBDT) notification No 61 & 62 dated 12th September 2019 has respectively notified the E- assessment Scheme 2019 & gave directions for its implementation.

E-assessment Scheme, 2019 to be now called as “Faceless Assessment”

Step wise process for Faceless Assessment

By the Notification issued by CBDT on 13th August, 2020, “E-assessment” will be now called as “Faceless Assessment”. Faceless assessment shall be made as per the following procedure:-

Step 1 – Issue of Notice on Assessee

  1. National e-Assessment Centre shall serve a notice on the assessee under section 143(2), specifying the issues for selection of his case for assessment
  2. Assessee may, within 15 days from the date of receipt of notice, file his response to the National e-assessment Centre

Step 2 – Case to be assigned to Assessment Unit

1.National e-assessment Centre shall assign the case selected for the purposes of e-assessment to a specific assessment unit in any one Regional e-assessment Centre through an automated allocation system

2. Where a case is assigned to the assessment unit, it may make a request to the National e-assessment Centre for:-

a. obtaining such further information, documents or evidence from the assesse or any other person

b. conducting of certain enquiry or verification by verification unit

c. seeking technical assistance from the technical unit

3. Where a request for obtaining further information, documents or evidence from the assessee or any other person has been made, the National e-assessment Centre shall issue appropriate notice or requisition to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit

4. Where a request for conducting of certain enquiry or verification by the verification unit has been made, the request shall be assigned by the National e-assessment Centre to a verification unit through an automated allocation system

5. Where a request for seeking technical assistance from the technical unit has been made, the request shall be assigned by the National e-assessment Centre to a technical unit in any one Regional e-assessment Centre through an automated allocation system

6. The assessment unit shall, after taking into account all the relevant material available on the record, make in writing, a draft assessment order either accepting the returned income of the assessee or modifying the returned income of the assessee, and send a copy of such order to the National e-assessment Centre with details of the penalty proceedings to be initiated therein, if any.

Step 3 – Draft Assessment Order

1.National e-assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to:-

a. finalise the assessment as per the draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment, or

b. provide an opportunity to the assessee, in case a modification is proposed, by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order, or

c. assign the draft assessment order to a review unit in any one Regional e-assessment Centre, through an automated allocation system, for conducting review of such order;

2. Review unit shall conduct review of the draft assessment order, referred to it by the National e-assessment Centre whereupon it may decide to:-

a. agree with the draft assessment order and intimate the National e-assessment Centre about such agreement; or

b. suggest such modification, as it may deem fit, to the draft assessment order and send its suggestions to the National e-assessment Centre;

3. National e-assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in sub point (a) or (b) of point (1), as the case may be

4. National e-assessment Centre shall, upon receiving modification suggestions from the review unit, communicate the same to the Assessment unit

5. Assessment unit shall, after considering the modifications suggested by the Review unit, send the final draft assessment order to the National e-assessment Centre

6. The National e-assessment Centre shall, upon receiving final draft assessment order, follow the procedure laid down in sub point (a) or (b) of point (1),as the case may be

7. The assessee may, in a case where show-cause notice has been served upon him, furnish his response to the National e-assessment Centre on or before the date and time specified in the notice

8. The National e-assessment Centre shall,-

a. in a case where no response to the show-cause notice is received, finalise the assessment as per the draft assessment order; or

b. in any other case, send the response received from the assessee to the assessment unit;

9. The assessment unit shall, after taking into account the response furnished by the assessee, make a revised draft assessment order and send it to the National e-assessment Centre

Step 4 – Final Order and Completion of Assessment

  1. The National e-assessment Centre shall, upon receiving the revised draft assessment order:-

a. in case no modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, finalise the assessment or

b. in case a modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, provide an opportunity to the assessee

c. the response furnished by the assessee shall be dealt with as per the procedure laid down in point 7, 8, 9 of Step 3

2. The National e-assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over such case for:

a. imposition of penalty

b. collection and recovery of demand

c. rectification of mistake;

d. giving effect to appellate orders

e. submission of remand report, or any other report to be furnished, or any representation to be made, or any record to be produced before the Commissioner (Appeals), Appellate Tribunal or Courts, as the case may be

f. proposal seeking sanction for launch of prosecution and filing of complaint before the Court;

3. National e-assessment Centre may at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case.

Faceless assessment facility was extended to the entire country on 13th August, 2020, ending territorial jurisdiction and individual discretion, where an officer was the whole and sole to the assessee. Scrutiny will be allotted on a random basis. Assessment of a taxpayer in Delhi could well be carried by an officer sitting in Pune. It will put an end to needless litigation. Best Judgements Assessments under Section 144 will be also now covered under Faceless Assessment.

What do you mean by Best Judgement Assessment?

The Best Judgment Assessment is a procedure under the Income Tax Act to comply with the principles of natural justice. Vide Section 144 of the Income Tax Act, 1961 the Assessing Officer is under an obligation to make an assessment of the total income or less to the best of his judgment in the following cases:

  1. If the person fails to file a return required under section 139(1) and he has not filed a revised return.
  2. If any person fails to comply with all the terms and conditions stipulated under a notice under section 142 or fails to comply with the directions requiring him to get his accounts audited in terms of section 142(2A).
  3. If any person, after having filed a return fails to comply with all the terms of a notice under section 143(2) requiring his presence or production of evidence and documents; or
  4. If the Assessing officer is not satisfied about the correctness and the completion of the accounts of the assessee if no method of accounting has been regularly employed by the assessee.

While Faceless Assessment and Taxpayers Charter came in force already, Faceless Appeal will be available from September 25, 2020. Under the Faceless Appeals system introduced by the government, appeals will be randomly allotted to any officer across the country and the identity of the officer deciding the appeal will remain unknown. Further, decisions will be team-based.

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Highlights of Launch of “Transparent Taxation – Honoring the Honest” by PM Modi

Highlights of Launch of “Transparent Taxation – Honoring the Honest” by PM Modi

Prime Minister has launch the platform for “Transparent Taxation – Honoring the Honest” via video conferencing today, on the 13th August 2020.

TheCBDT  has carried out several major tax reforms in direct taxes in the recent years.   Last year the Corporate Tax rates were reduced from 30 percent to 22 percent and for new manufacturing units the rates were reduced to 15 percent. Dividend distribution Tax was also abolished.

The focus of the tax reforms has been on reduction in tax rates and on simplification of direct tax laws. Several initiatives have been taken by the CBDT for bringing in efficiency and transparency in the functioning of theIT Department.

The launch of the platform for “Transparent Taxation – Honoring the Honest” by the Prime Minister will further carry forward the journey of direct tax reforms.

FM Begins her speech by saying

Steps Taken by Government in Corporate Tax and Personal Income Tax as per FM

E Assessment, DIN , Pre Filing of Tax Returns and other measures

FM further said department is helping taxpayers in filing Income Tax Returns Form. Today is a landmark day in the history of tax administration. To realize Prime Minister’s vision to empower taxpayers, through a transparent system, Honoring The Honest, Income Tax Department
has put in place a platform which is being launched today

Further She Adds Thanks to the Government Reforms and Transparency, India has seen a reduction in the number of cases for scrutiny.

Taxpayers can avail the new income tax regime from this financial year onwards and enjoy the benefits of relatively less documentation and greater ease of compliance increased liquidity in the hands of the taxpayer, and flexibility of investment choices

PM Launch new Platform

PM Modi says the new platform launched has major reforms like Faceless Assessment, Faceless Appeal and Taxpayers Charter. Faceless Assessment and Taxpayers Charter have come into force from today

PM says faceless assessment, faceless appeal and taxpayer charter part of new platform ‘Transparent Taxation – Honoring the Honest’

Faceless Assessments and Faceless Appeals and Taxpayers Charter

The process of Structural Reforms in our country has reached a new stage today. Transparent Taxation – Honoring the Honest, a new system of 21st century tax system has been launched today: PM

The facility of faceless appeal will be available for citizens across the country from 25th September. Today as the tax system is becoming faceless, it is giving confidence to the taxpayer of fairness and fearlessness says PM Modi

The emphasis is on making every rule-law, policy people-centric and public friendly. This is the use of the new governance model and the country is getting its results says PM

The honest taxpayers of the country play a big role in nation-building. When the life of an honest taxpayer becomes easy then the country also develops: PM

In the last 6 years Government’s focus has been ‘Banking the Unbanked’, ‘Securing the Unsecured’ and ‘Funding the Unfunded’. Today a new journey is starting in a way – ‘Honoring The Honest’

The facility of faceless appeal will be available for citizens across the country from 25th September. Today as the tax system is becoming faceless, it is giving confidence to the taxpayer of fairness and fearlessness: PM

Taxpayers can avail the new income tax regime from this financial year onwards and enjoy the benefits of relatively less documentation and greater ease of compliance increased liquidity in the hands of the taxpayer, and flexibility of investment choices

New arrangements and new facilities starting today, strengthens our commitment towards ‘Minimum Government, Maximum Governance’. This is a big step in the direction of reducing interference of the government in the life of the countrymen:

The honest taxpayers of the country play a big role in nation-building. When the life of an honest taxpayer becomes easy then the country also develops: PM

Record FDI coming to India shows change in fundamental and economic reforms. Even during the pandemic, FDI inflow in India has reached record levels:

From power-centric to people-centric and public friendly approach – every rule, law and policy is taken out of the process. This is the use of the new governance model of new India and the country is getting happy results as well: PM

New arrangements and new facilities starting today, strengthens our commitment towards ‘Minimum Government, Maximum Governance’. This is a big step in the direction of reducing interference of the government in the life of the countrymen: PM

From power-centric to people-centric and public friendly approach – every rule, law and policy is taken out of the process. This is the use of the new governance model of new India and the country is getting happy results as well: PM

Fundamental and Structural Reforms were needed in the tax system of India because our system was created during the period of slavery but it evolved slowly. Post Independence a lot of changes were made but the system largely remained the same: PM

Compliance is also difficult where there is complexity. If the law is very clear then the taxpayer is happy as well as the country. This work has been done for some time like GST has come by replacing dozens of taxes: PM

There was a time when there used to be a lot of talk about reforms. Decisions were taken out of compulsion and were known as reforms. Due to which the desired results couldn’t be achieved: PM Modi launches a new tax platform – ‘Transparent Taxation – Honouring the Honest’

Along with the complexities of the procedures, tax has also been reduced in India. Tax is now zero on income of Rs. 5 lakh. In the remaining slabs, the tax has come down. We are one of the lowest tax consuming countries in the world in terms of corporate tax: PM

Our effort is that our tax system should be Seamless, Painless, Faceless. Seamless means that the tax administration should work to solve the problem instead of confusing every taxpayer

Taxpayers charter is also a big step in the country’s development journey: PM

The taxpayer is now assured of fair, courteous and rational behavior. That is, the income tax department now has to take care of the taxpayer’s dignity sensitively

Out of all the tax returns in the year 2012-13, there was scrutiny of 0.94%. In the year 2018-19, this figure has come down to 0.26%. This indicates that the scrutiny of the case has reduced by almost 4 times: PM

Those who are able to pay tax but are not paying taxes, should come forward with self-motivation. This is my request: PM

More than 1,500 obsolete laws have been abolished during the last few years. India’s Ease Of Doing Business ranking has improved from 134 a few years ago to 63 today. A lot of reforms have been brought about which led to this

Compliance is also difficult where there is complexity. If the law is very clear then the taxpayer is happy as well as the country. This work has been done for some time like GST has come by replacing dozens of taxes

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IT Department hopes to complete all Faceless e-Assessments by mid-September

IT Department hopes to complete all Faceless e-Assessments by mid-September

Out of 58,319 selected cases, 8,700 cases have already been disposed off

3,130 tax personnel, including 600 IT officers are busy implementing the Faceless e-Assessment scheme of Income Tax. Out of 58,319 cases selected for faceless assessment, already 8,700 cases have been disposed off. The scheme, first announced by the Finance Minister Ms. Nirmala Sitharaman in the 2019 budget speech, is seen as a big leap towards transparent tax administration.

“This is the first time that we are doing the faceless e-assessment. The work has picked up since July, after having addressed all the issues related to infrastructure, manpower, hardware and software.

Our target is to finish all the cases by mid-September” said Shri S K Gupta, Principal Chief Commissioner of Income Tax and Member, Central Board of Direct Taxes (CBDT). 

The Income Tax Department in October 2019 rolled out the faceless e-assessment scheme that eliminates physical interface between an assessing officer and an assessee.  Eight cities – Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad and Pune are covered under the scheme.  Shri Gupta said that the cases taken up for faceless e-assessment include a mix of returns filed by individuals, businesses, MSME as well as big companies.

IT Department hopes to complete all Faceless e-Assessments by mid-September
IT Department hopes to complete all Faceless e-Assessments by mid-September

How the faceless e-assessment works?

The National e-Assessment Centre in Delhi is the single point of contact for the taxpayer as well as for all units conducting assessment. 

It is the NEC which issues notices under Section 143(2) to the assesse for which the assessee is required to respond within 15 days of receipt of notice.  Upon the issue of a notice, NEC allocates the case to any Assessment Unit through an automated allocation system, ensuring anonymity.

The conventional system of scrutiny assessment involved a high level of personal interaction between the tax payer and the Income Tax Department officials. Under the faceless e-assessment system, the tax payer would not know by whom his /her return is being assessed or in which city.

“The anonymity and the absence of human interface will go a long way in addressing the issue of harassment as well as curb instances of corruption” Shri Gupta added. “Instead of territorial jurisdiction, we have brought it dynamic jurisdiction” he added.

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CBIC launches e-Office application to automate file handling

CBIC launches e-Office application to automate internal file handling

Central Board of Indirect Taxes and Custom (CBIC) on 15th June, 2020, launched the e-Office application in over 500 GST and Customs offices pan India. Over 50,000 officers and staff will use this application, making CBIC one of the largest Government departments to automate its internal office procedures. This office intends to facilitate a ‘Faceless, Contactless and Paperless’ indirect Tax administration.

The e-Office application was launched remotely in the presence of over 800 senior officers of CBIC by Chairman Ajit Kumar. The e-Office application is developed by the National Informatics Centre (NIC) and is supported by the Department of Administrative Reforms and Public Grievances (DARPG). The e-Office application’s main module, eFile, enables on-line file related work, starting from receiving and marking dak, operating a file, preparing a draft letter, its approval/signature and dispatch of the signed letter.

Benefits to accrue due to E-office

  • E-Office aims to improve governance by automating the internal processes of handling files and taking decisions within Government.
  • The use of e-Office by the rank and file of the GST and Customs officers in their day to day work would lead to speedier decision making, transparency, accountability, and positive impact on the environment by cutting down the use of paper and printing
  • In the present-day challenging situation arising due to COVID-19, the e-Office would help avoid contact with physical files, thereby preventing possible transmission of coronavirus. 
  • It would ensure enhanced security as no file or document can be altered or destroyed or backdated.
  • An in-built monitoring mechanism would identify where the files are held up enabling quick disposal and faster decision making.
  • E-Office would complement CBIC’s many other IT-led reforms which are directly aimed at enhancing the ease of doing business for the trade and industry.
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CBIC also recently introduced Electronic Communication of PDF based copies of Shipping Bills & E- Gate Pass

In its continuing endeavor to promote ‘Faceless, Contactless, Paperless Customs’ the Central Board of Indirect Taxes & Customs (CBIC) has decided to rely upon digital copies of the Shipping Bill and do away with the requirement of taking bulky printouts from the Service Centre or maintenance of voluminous physical dockets in the Custom Houses.

This reform will yield immense benefits in terms of saving the time and cost of compliance for the trade, thereby enhancing the ease of doing business, while providing enhanced security features for verification of authenticity and validity of the electronic document.

CBIC directed that w.e.f 22.06.2020 only the digital copy of the Shipping Bill bearing the Final LEO would be electronically transmitted to the exporter and the present practice of printing copies of the said document for the exporters and also for maintaining a docket in the Customs House would stand discontinued.

The launch of e-Office marks a fundamental change in internal office procedures which is so far based on manual handling of files and paper movement.

The launch of e-Office is one more measure taken by the CBIC in leveraging technology for providing a faceless, contactless and paperless indirect tax administration. Taxpayers are also encouraged to mention their mobile number and email in their communications to facilitate immediate acknowledgement by mail and SMS through the application.

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Know how 7116 faceless scrutiny under 1st phase disposed by Income Tax Dept

Know how 7116 faceless scrutiny under 1st phase disposed by Income Tax Dept

Finance Minister Nirmala Sitharaman had announced the faceless assessment scheme also known as the e-assessment scheme in her Budget speech on July 5, 2019, which was subsequently inaugurated on October 7, 2019. This was aimed at moving to faceless scrutiny and elimination of human interface in assessment proceedings.

The scheme was set to bring in a “paradigm shift” in taxation by eliminating human interface in the income tax assessment system. The Ministry of Finance vide Central Board of Direct Taxes (CBDT) notification No 61 & 62 dated 12th September 2019 has respectively notified the E-assessment Scheme 2019 & given directions for its implementation.

Since its launch on October 7, 2019 and implementation of first phase, faceless scrutiny assessment scheme has provided for assessment of income tax in electronic mode, where taxpayers need not see face-to-face any tax officer or visit an I-T office and can e-file reply on the income tax portal.

All the communications with taxpayers is made electronically by a central cell in Delhi and identity of all assessing officers remains unknown to taxpayers at all times. This scheme is a welcome relief in the backdrop of the COVID pandemic where social distancing is mandated as a means of safety.

Situation Prior to Faceless Assessment

  • Earlier during assessment proceedings in scrutiny cases, taxpayers or tax professional/s were required to make multiple visits to the income tax office.
  • There were allegations and some incidences of discretion and subjective approach which often resulted into high-pitched assessments. In tax recovery proceedings, almost similar types of allegations were being made.
  • These concerns will be addressed when the income tax process becoming faceless.
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First Phase of faceless assessment

In the first phase of faceless assessment, a total of 58,319 cases were assigned in an automated way randomly and these were kept away from the geographical jurisdiction of the case, based on computer algorithms. Out of this:-

  • 7,116 cases as on date have been disposed of with assessment orders issued without any additions
  • 291 cases, wherein additions are proposed to be made, have been submitted to Risk Management unit.

Cases are centrally selected for scrutiny using computer aided selection for scrutiny. Some scrutiny cases are also selected manually on the basis of specified criteria. Old assessments can also be re-opened if the assessing officer has sufficient reason to believe that some income has escaped assessment.

In all the cases, the grievances of over-pitched assessment or harassment of taxpayers/tax professional have been almost eliminated.

Separately, a Finance Ministry official said that now almost 99% returns are e-filed. Out of more than 6 crore returns filed annually, only about 3 lakh returns come under scrutiny on the basis of select risk parameters.

The government has already notified revised Form 26AS which would have additional details on taxpayers’ high-value financial transactions, like cash deposit/withdrawal, property purchases, undertaken during a financial year and would facilitate voluntary compliance and ease of e-filing of I-T returns. This will also help in verifying all available information in faceless manner and help in seamless implementation of first phase of faceless assessment. The taxpayers have been advised to check their registered e-filing accounts/email ids for notices or updates.

Let us learn more in detail about the Faceless Compliance Scheme or e-assessment scheme.

Most important feature of E-assessment Scheme – No personal appearance in the Centre’s or Units

  1. A person shall not be required to appear either personally or through authorised representative for any proceedings before the income-tax authority at the National e-assessment Centre or Regional e-assessment Centre or any unit set up under this Scheme.
  2. If a modification is proposed in the draft assessment order, and an opportunity is provided to the assessee by serving a notice calling upon him to show-cause as to why the assessment should not be completed as per the draft assessment order, the assessee or his authorised representative, shall be entitled to seek personal hearing so as to make his oral submissions or present his case before the income-tax authority in any unit under this Scheme.
  3. Such hearing shall be conducted exclusively through video conferencing, including use of any telecommunication application software which supports video telephony
  4. Any examination or recording of the statement of the assessee or any other person (other than statement recorded in the course of survey under section 133A of the Act) shall be conducted by an income-tax authority in any unit, exclusively through video conferencing, including use of any telecommunication application software which supports video telephony.
  5. The Board shall establish suitable facilities for video conferencing including telecommunication application software which supports video telephony at such locations as may be necessary, to ensure that the assessee, or his authorized representative, or any other person is not denied the benefit of this Scheme merely on the consideration that such assessee or his authorised representative, or any other person does not have access to video conferencing at his end.

How is the exchange of communication to be carried out under this Scheme?

  1. Communications between the National e-assessment Centre and the assessee, or his authorized representative, shall be exchanged exclusively by electronic mode; and
  2. Internal communications between the National e-assessment Centre, Regional e-assessment Centre’s and various units shall be exchanged exclusively by electronic mode.

How are Electronic records authenticated under this Scheme?

  1. An electronic record shall be authenticated by the originator by affixing his digital signature in accordance with section 3(2) of the Information Technology Act, 2000.
  2. In case of the originator, being the assesse or any other person, such authentication may also be done by electronic signature or electronic authentication technique in accordance with section 3A(2) of the said Act.

How are notices or orders delivered under this Scheme?

  1. Every notice or order or any other electronic communication under this Scheme shall be delivered to the the assessee, by way of-
  2. placing an authenticated copy thereof in the assessee’s registered account; or
  3. sending an authenticated copy thereof to the registered email address of the assessee or his authorized representative; or
  4. uploading an authenticated copy on the assessee’s Mobile App followed by a real time alert.
  5. Every notice or order or any other electronic communication under this Scheme shall be delivered to any other person, by sending an authenticated copy thereof to the registered email address of such person, followed by a real time alert.
  6. The Assessee shall file his response to any notice, order or any other electronic communication, under this Scheme, through his registered account.
  7. Once an acknowledgement is sent by the National e-assessment Centre containing the hash result generated upon successful submission of response, the response shall be deemed to be authenticated.

What is the procedure of assessment under this Scheme?

The assessment under this Scheme shall be made as per the following procedure:-

Step 1 – Issue of Notice on Assessee

  1. National e-Assessment Centre shall serve a notice on the assessee under section 143(2), specifying the issues for selection of his case for assessment
  2. Assessee may, within 15 days from the date of receipt of notice, file his response to the National e-assessment Centre

Step 2 – Case to be assigned to Assessment Unit

  1. National e-assessment Centre shall assign the case selected for the purposes of e-assessment to a specific assessment unit in any one Regional e-assessment Centre through an automated allocation system
  2. Where a case is assigned to the assessment unit, it may make a request to the National e-assessment Centre for:-
  3. obtaining such further information, documents or evidence from the assesse or any other person
  4. conducting of certain enquiry or verification by verification unit
  5. seeking technical assistance from the technical unit
  6. Where a request for obtaining further information, documents or evidence from the assessee or any other person has been made, the National e-assessment Centre shall issue appropriate notice or requisition to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit
  7. Where a request for conducting of certain enquiry or verification by the verification unit has been made, the request shall be assigned by the National e-assessment Centre to a verification unit through an automated allocation system
  8. Where a request for seeking technical assistance from the technical unit has been made, the request shall be assigned by the National e-assessment Centre to a technical unit in any one Regional e-assessment Centre through an automated allocation system
  9. The assessment unit shall, after taking into account all the relevant material available on the record, make in writing, a draft assessment order either accepting the returned income of the assessee or modifying the returned income of the assessee, and send a copy of such order to the National e-assessment Centre with details of the penalty proceedings to be initiated therein, if any

Step 3 – Draft Assessment Order

  1. National e-assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to:-
  2. finalise the assessment as per the draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment, or
  3. provide an opportunity to the assessee, in case a modification is proposed, by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order, or
  4. assign the draft assessment order to a review unit in any one Regional e-assessment Centre, through an automated allocation system, for conducting review of such order;
  5. Review unit shall conduct review of the draft assessment order, referred to it by the National e-assessment Centre whereupon it may decide to:-
  6. agree with the draft assessment order and intimate the National e-assessment Centre about such agreement; or
  7. suggest such modification, as it may deem fit, to the draft assessment order and send its suggestions to the National e-assessment Centre;
  8. National e-assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in sub point (a) or (b) of point (1), as the case may be
  9. National e-assessment Centre shall, upon receiving modification suggestions from the review unit, communicate the same to the Assessment unit
  10. Assessment unit shall, after considering the modifications suggested by the Review unit, send the final draft assessment order to the National e-assessment Centre
  11. The National e-assessment Centre shall, upon receiving final draft assessment order, follow the procedure laid down in sub point (a) or (b) of point (1),as the case may be
  12. The assessee may, in a case where show-cause notice has been served upon him, furnish his response to the National e-assessment Centre on or before the date and time specified in the notice
  13. The National e-assessment Centre shall,-
  14. in a case where no response to the show-cause notice is received, finalise the assessment as per the draft assessment order; or
  15. in any other case, send the response received from the assessee to the assessment unit;
  16. The assessment unit shall, after taking into account the response furnished by the assessee, make a revised draft assessment order and send it to the National e-assessment Centre

Step 4 – Final Order and Completion of Assessment

  1. The National e-assessment Centre shall, upon receiving the revised draft assessment order:-
  2. in case no modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, finalise the assessment or
  3. in case a modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order,provide an opportunity to the assessee
  4. the response furnished by the assessee shall be dealt with as per the procedure laid down in point 7, 8, 9 of Step 3
  5. The National e-assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over such case for:
  6. imposition of penalty
  7. collection and recovery of demand
  8. rectification of mistake;
  9. giving effect to appellate orders
  10. submission of remand report, or any other report to be furnished, or any representation to be made, or any record to be produced before the Commissioner (Appeals), Appellate Tribunal or Courts, as the case may be
  11. proposal seeking sanction for launch of prosecution and filing of complaint before the Court;
  12. National e-assessment Centre may at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case.

Can any penalty be imposed under this Scheme?

  1. Any unit may, for noncompliance of any notice, direction or order issued under this Scheme on the part of the assessee or any other person, send recommendation for initiation of any penalty proceedings, against such assessee or any other person, as the case may be, to the National e-assessment Centre, if it considers necessary to do so.
  2. The National e-assessment Centre shall, on receipt of such recommendation, serve a notice on the assessee or any other person, calling upon him to show cause as to why penalty should not be imposed on him under the Act.
  3. The response to show – cause notice furnished by the assessee or any other person, if any, shall be sent by the National e-assessment Centre to the concerned unit which has made the recommendation for penalty.
  4. The said unit shall, after taking into consideration the response furnished by the assesse or any other person:-
  5. make a draft order of penalty and send a copy of such draft to National e-assessment Centre; or
  6. drop the penalty after recording reasons, under intimation to the National e-assessment Centre.
  7. The National e-assessment Centre shall levy the penalty as per the said draft order of penalty and serve a copy of the same on the assessee or any other person, as the case may be.

Is there any option available for a person aggrieved with the order under this Scheme?

An appeal against an assessment made by the National e-assessment Centre under this Scheme shall lie before the Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing Officer.

The faceless assessment system of Income Tax Department has been a game changer in the arena of direct taxation. It has empowered the taxpayers and has, as a foremost mechanism, altered the facets and perception of overall tax administration in India.

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