Faceless assessment means carrying out of income tax assessment procedure without human interface with the use of technology. The Cases shall be assigned to the department through automated allocation system. There will be no direct contact of A.O with assessee.
a) The provisions of the proposed Section 144B will apply to assessment, reassessment, or re-computation under Sections 143(3), 144, or 147 of the Act.
b) The National Faceless Assessment Centre (NaFAC) will assign the case for faceless assessment to a specific Assessment Unit (AU).
c) A notice under section 143(2) or 142(1) of the Act will be served on the taxpayer through NaFAC. The taxpayer may file his response to the said notice under Section 143(3) to the NaFAC, which will forward the reply to the AU. The response has to be filed within the date specified in such notice. If the AU requires further information, documents, or evidence from the taxpayer or any other person, it may do so through NaFAC. NaFAC will serve appropriate notice or requisition on the taxpayer or any other person for obtaining such information, etc.
The AU may also make a request through NaFAC for conducting inquiry by Verified Unit (VU).
The AU may request for any technical matter by referring to the Technical Unit (TU) through NaFAC
The taxpayer or any other person will file his reply in response to the said notice to NaFAC, which will forward the reply to the AU.
In case of failure by the taxpayer, NaFAC will intimate the same to the AU.
In such a case, AU will serve upon the taxpayer, through NaFAC, a Show Cause Notice under Section 144, providing him with an opportunity to explain why the assessment should not be completed to the best of its judgment. Further, any report received by NaFAC from VU or TU will also be forwarded to the AU.
d) The taxpayer will file his response to the show cause notice under Section 144 of the Act to NaFAC, which will forward it to the AU. If the taxpayer does not respond, NaFAC will intimate the same to the AU.
e) The AU, after considering all the relevant material available on the record, will prepare an income or loss determination proposal where no variation prejudicial to the taxpayer is proposed and send the same to NaFAC.
If a variation is proposed, then a show cause notice – through NaFAC, will be served on the taxpayer stating the variations proposed to be made to the income and asking him to submit why the proposed variation should not be made.
f) The taxpayer is required to file his reply to the said show-cause notice to NaFAC within the time allowed to him. NaFAC will forward the reply to the AU. If the taxpayer fails to respond within the specified time, NaFAC will intimate the same to the AU. After considering the taxpayer’s response or intimation from NaFAC of failure of the taxpayer to file a response, and all material available on the record, the AU will prepare an income or loss determination proposal and send the same to NaFAC.
g) Upon receipt of the proposal, as above, with or without any verification proposed to the taxpayer’s income, NaFAC may, based on guidelines issued by the CBDT, convey to the AU to prepare a draft order in consonance with such proposal. The AU will then prepare a draft order or assign such proposal to a Review Unit (RU), which after conducting a review, will prepare a review report and send it to NaFAC.
h) NaFAC will forward such review report to the AU. The AU may accept or reject the modification(s) proposed in such a review report and prepare a draft order accordingly and send it to NaFAC. Reasons for rejection by AU of the modification proposed by the AU will be recorded in writing.
i) Such a draft order, where there is a proposal to make any variation, which is against the interest of eligible taxpayers under Section 144C (1), will be sent to Dispute Resolution Panel (DRP). In any other case, NaFAC will convey to the AU to complete the assessment in accordance with such draft order. AU will pass the final assessment order and initiate penalty proceedings, if any, and send it to NaFAC. NaFAC will serve a copy of such final order, demand notice, etc., to the taxpayer.
j) Any eligible taxpayer, as referred to in Section 144C, upon receiving the draft order as served on him as above, will file his acceptance or rejection to the variation proposal with DRP under section 144C, and NaFAC, within specified time
k) In case the variation proposed as above are accepted by the taxpayer or not objected to within the aforesaid time, NaFAC will intimate AU of the same. AU will then complete the assessment based on the draft order within specified time
l) Where the eligible taxpayer files objections with DRP, NaFAC will send such intimation along with a copy of such objections to the AU. Upon receipt of directions received by DRP, NaFAC will forward such directions to the AU. AU will complete the assessment within specified time. The AU will also initiate penalty proceedings, if any, in consonance with the directions issued by DRP. AU will then send a copy of such order to NaFAC.
m) NAFAC, upon receipt of the final assessment order, etc., in the case of an eligible taxpayer, under Section 144 C or in any other case, will serve a copy of such order, etc., on the taxpayer along with the demand notice.
n) NaFAC, after completion of the assessment, will transfer all the electronic records of the case to the AO having jurisdiction over the case for such action, as may be required under the provisions of the Income Tax Act.
