income tax

CBDT's Order on Faceless Assessment Responsibilities Explained

Overview of CBDT’s Order on Faceless Assessment Responsibilities

On October 25, 2023, the Central Board of Direct Taxes (CBDT), part of the Ministry of Finance, Government of India, issued a significant order under section 119 of the Income-tax Act, 1961. This order delineates the roles and responsibilities of the Principal Chief Commissioners of Income Tax (Pr.CCsIT) and the Principal Chief Commissioner of Income Tax (NaFAC), particularly emphasizing changes pertinent to Faceless Assessment.

Background of the Order

The new order supersedes an earlier directive issued on March 31, 2021, enhancing and clarifying the responsibilities of the Pr.CCsIT and Pr. CCIT (NaFAC) regarding the efficient administration of Faceless Assessment.

Responsibilities of Pr. CCIT (NaFAC)

The order outlines several critical responsibilities for the Pr. CCIT (NaFAC), including:

1. Overall Implementation

  • The Pr. CCIT (NaFAC) is tasked with the comprehensive implementation of the CBDT's policies concerning Faceless Assessment.

2. Guidelines and Standard Operating Procedures (SOPs)

  • Formulate the necessary Guidelines and SOPs for the operational work of Assessment Units, Verification Units, Review Units, and Technical Units, subject to the CBDT's prior approval.

3. Technical Support

  • Ensure that Technical Units offer informed perspectives on legal issues and provide the necessary technical support for Assessment Units.

4. Improvement Advisory

  • Advise the CBDT on strategies to enhance the efficiency and effectiveness of Faceless Assessment processes.

Immediate Effect of the Order

The CBDT's order indicates that these modifications take effect immediately, highlighting the urgency of improving governance and procedures in the realm of direct taxation through Faceless Assessments.

Conclusion

The recent order from the CBDT, issued under section 119 of the Income-tax Act, 1961, redefines the roles of Pr.CCsIT and Pr. CCIT (NaFAC) with regard to Faceless Assessment. These adjustments demonstrate the government’s commitment to refining the assessment process, making it more efficient and transparent. By enhancing the responsibilities assigned to the Pr. CCIT (NaFAC), the order seeks to optimize procedural frameworks and improve the quality of technical assistance, ultimately benefitting taxpayers and the taxation authorities alike. The immediate implementation of these changes underscores the urgency in creating a fair and effective taxation system in India.

Partial Modification of Previous Orders

In accordance with the directive under section 119 of the Income-tax Act, 1961, the CBDT has made a partial modification to the earlier order (F.No. 187/3/2020-ITA-I dated March 31, 2021). The Board outlines the following revised responsibilities for the Pr. CCIT (NaFAC):

  • Overall implementation of the CBDT's policies regarding Faceless Assessment.
  • Development of Guidelines and SOPs for Assessment Units, Verification Units, Review Units, and Technical Units, pending approval from the Board.
  • Assurance that Technical Units provide well-considered legal insights and required technical support to Assessment Units.
  • Advised improvement recommendations to enhance the efficiency and effectiveness of Faceless Assessment processes.