income tax
The Faceless Assessment scheme, initiated by the Income Tax Department of India, is intended to improve the transparency, efficiency, and equity of tax assessments. By utilizing modern technology, the scheme minimizes direct interaction between taxpayers and tax authorities, hence avoiding personal discretion, corruption, and inefficiency in the assessment process.
Faceless Assessment is covered under Section 144B of the Income Tax Act, 1961.
The scheme, previously created for best judgment and scrutiny assessments, is presently applied to all assessment proceedings, including reassessment proceedings, barring some exceptions in cases being assigned to Central and International Tax divisions.
The major aim is to enhance transparency, accountability, and convenience to taxpayers by putting all assessment procedures in electronic format through the National Faceless Assessment Centre (NFAC).
The operation of the Faceless Assessment scheme is based on a strong digital infrastructure, which consists of:
National Faceless Assessment Centre (NFAC): It is the central command that controls the whole process, issuing notices, allocating cases, and coordinating with different units.
Regional Faceless Assessment Centres (RFAC): They assist NFAC operations at the regional level.
Assessment Units (AU): They are experts in reviewing information, recognizing issues, and preparing draft assessment order preparation.
Verification Units (VU): It is their responsibility to conduct inquiries, examine documents, and obtain evidence.
Technical Units (TU): Professionals under these units provide technical views regarding complicated matters on the basis of law, accounting, information technology, valuation, and transfer pricing.
Review Units (RU): They verify correctness and completeness of the draft assessment order.
Dynamic Jurisdiction: Cases are allocated randomly throughout the country to put an end to territorial prejudice and minimize resources.
Case Selection and Notice
Assignment and Information Gathering
Revise Contact Information: Make sure your email ID and mobile number in the income tax portal are updated for timely notices.
Prompt and Accurate Responses: Provide prompt and accurate responses to all notices and queries.
Maintain Records: Maintain precise records of all communications and submissions related to your assessment.
Professional Guidance: Seek the opinion of an expert if you are unsure about any legal or procedural matter.
Don't Ignore Alerts: Don't neglect alerts because inaction may lead to negative reviews and penalties.
Utilize Video Conferencing if Necessary: Proceed and ask for a virtual hearing if you are required to present your case.
Make Honest Revelations: Make honest disclosures in your revelations since the department relies on advanced analysis and cross-validation from third-party data.
Wider Inclusive Range: The faceless scheme is now implemented to nearly all audits, excluding Central and International Tax cases alone.
No Personal Visits Needed: No personal visit is needed from citizens to offices; all work is computer-based.
Electronic Signing: All notice and response need to be electronically signed so that they will be valid.
Allocated Cases through Automation: The centre reduces the level of discretion or bias of tax officials.
Audit Trail: Detailed logging of the operations performed brings transparency and accountability.
Q: What is the main purpose of faceless assessment under Section 144B? A: The key concept is to ensure that taxpayers are not forced to go through direct interaction with tax authorities, thus promoting transparency, efficiency, and fairness in taxation assessment.
Q: Am I eligible for a personal hearing under faceless assessment? A: Yes, you can request a hearing through video conferencing if necessary to be heard before it.
Q: How are cases assigned in the faceless system? A: Cases are randomly and electronically assigned without territorial jurisdiction and less bias.
Q: What happens if one fails to respond to a faceless assessment notice? A: Failure to respond may result in adverse assessment orders and possible penalties.
Faceless Examination under Section 144B of the Income-tax Act, 1961 is a revolutionary reform that leverages technology to increase the transparency and efficiency of taxation assessment. Not only do processes like these get streamlined, but taxpayer-friendly as well.