What is Faceless Assessment scheme 2021? Complete Detail

What is Faceless Assessment scheme? The Faceless Assessment (earlier known as E-assessment) has been rolled out to remove the human interface between the taxpayer and the Income Tax Department.

Transparent Taxation – Honoring the Honest: For honoring the Honest taxpayers, the Prime Minister Narendra Modi launched a faceless tax scrutiny and appeal and urged people to pay their due taxes and contribute to nation building.

The Central Government makes the Faceless Assessment Scheme which was previously named as the E-assessment Scheme, 2019. This scheme was made vide CBDT Notification S.O. 3264(E) dated 12^th September, 2019 as last amended by Notification S.O. 741(E) dated 17th February, 2021.

Table of Contents

What are the features of the Faceless Assessment Scheme?

Following are main features of Faceless Assessment Scheme for Honoring the Honest:

Selection of a taxpayer only through system using data analytics and Artificial Intelligence (AI)
Automated random allocation of cases
No physical interface, no need to visit the income tax office
Dynamic Jurisdiction to Abolition of territorial jurisdiction
Team based assessments and team-based review
Central issuance of notices with Document Identification Number (DIN)
Draft assessment order in one city, review in another city and finalisation in third city.
2/3^rd of the manpower is utilised for faceless assessment and balance for other functions.

You may also like to read faceless appeal scheme and faceless penalty scheme.

Faceless Assessment Scheme

In exercise of the powers conferred by sub-section (3A) of section 143 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely:

1. Short title and commencement:

(1) This Scheme may be called the Faceless Assessment Scheme, 2019.

(2) It shall come into force on the date of its publication in the Official Gazette.

2. Definitions:

(1) In this Scheme, unless the context otherwise requires, ––

(i) “Act” means the Income-tax Act, 1961 (43 of 1961);
(ii) “addressee” shall have the same meaning as assigned to it in clause (b) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(iii) “assessment” means assessment of total income or loss of the assessee under sub-section (3) of section 143 or section 144 of the Act;
(iv) “authorised representative” shall have the same meaning as assigned to it in sub-section (2) of section 288 of the Act;
(v) “automated allocation system” means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources;
(vi) “automated examination tool” means an algorithm for standardised examination of draft orders, by using suitable technological tools, including artificial intelligence and machine learning, with a view to reduce the scope of discretion;
(vii) “Board” means Central Board of Direct Taxes constituted under the Central Board of Revenues Act, 1963 (54 of 1963);
(viii) “computer resource” shall have the same meaning as assigned to them in clause (k) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(ix) “computer system” shall have the same meaning as assigned to them in clause (l) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(x) “computer resource of assessee” shall include assessee’s registered account in designated portal of the Income-tax Department, the Mobile App linked to the registered mobile number of the assessee, or the registered email account of the assessee with his email service provider;
(xi) “digital signature” shall have the same meaning as assigned to it in clause (p) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(xii) “designated portal” means the web portal designated as such by the Principal Chief Commissioner or Principal Director General, in charge of the National e-assessment Centre;
(xiia) “Dispute Resolution Panel” shall have the same meaning as assigned to in clause (a) of sub-section (15) of section 144C of the Act;
(xiii) “e-assessment” means the assessment proceedings conducted electronically in ‘e-Proceeding’ facility through assessee’s registered account in designated portal;
(xiv) “electronic record” shall have the same meaning as assigned to it in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(xv) “electronic signature” shall have the same meaning as assigned to it in clause (ta) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(xva) “eligible assessee” shall have the same meaning as assigned to in clause (b) of subsection (15) of section 144C of the Act;
(xvi) “email” or “electronic mail” and “electronic mail message” means a message or information created or transmitted or received on a computer, computer system, computer resource or communication device including attachments in text, image, audio, video and any other electronic record, which may be transmitted with the message.;
(xvii) “hash function” and “hash result” shall have the same meaning as assigned to them in the Explanation to sub-section (2) of section 3 of the Information Technology Act, 2000 (21 of 2000);
(xxiiia) “Rules” means the Income-tax Rules, 1962;
(xviii) “Mobile app” shall mean the application software of the Income-tax Department developed for mobile devices which is downloaded and installed on the registered mobile number of the assessee;
(xix) “originator” shall have the same meaning as assigned to it in clause (za) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);
(xx) “real time alert” means any communication sent to the assessee, by way of Short Messaging Service on his registered mobile number, or by way of update on his Mobile App, or by way of an email at his registered email address, so as to alert him regarding delivery of an electronic communication;
(xxi) “registered account” of the assessee means the electronic filing account registered by the assessee in designated portal;
(xxii) “registered e-mail address” means the e-mail address at which an electronic communication may be delivered or transmitted to the addressee, including-
- (a) the email address available in the electronic filing account of the addressee registered in designated portal; or
- (b) the e-mail address available in the last income-tax return furnished by the addressee; or
- (c) the e-mail address available in the Permanent Account Number database relating to the addressee; or
- (d) in the case of addressee being an individual who possesses the Aadhaar number, the e-mail address of addressee available in the database of Unique Identification Authority of India; or
- (e) in the case of addressee being a company, the e-mail address of the company as available on the official website of Ministry of Corporate Affairs; or
- (f) any e-mail address made available by the addressee to the income-tax authority or any person authorised by such authority.
(xxiii) “registered mobile number” of the assessee means the mobile number of the assessee, or his authorised representative, appearing in the user profile of the electronic filing account registered by the assessee in designated portal;
(xxiv) “video conferencing or video telephony” means the technological solutions for the reception and transmission of audio-video signals by users at different locations, for communication between people in real-time.

(2) Words and expressions used herein and not defined but defined in the Act shall have the meaning respectively assigned to them in the Act.

[The sub-paragraph (1) of paragraph 2 has been amended w.e.f. 17.02.2021 by the Faceless Assessment (First Amendment) Scheme, 2021 vide notification number S.O. 741(E), dated the 17th February, 2021]

3. Scope of the Scheme:

The assessment under this Scheme shall be made in respect of such territorial area, or persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board.

4. E-assessment Centres:

(1) For the purposes of this Scheme, the Board may set up-

(i) a National e-assessment Centre to facilitate the conduct of e-assessment proceedings in a centralised manner, which shall be vested with the jurisdiction to make assessment in accordance with the provisions of this Scheme;
(ii) Regional e-assessment Centres as it may deem necessary to facilitate the conduct of e-assessment proceedings in the cadre controlling region of a Principal Chief Commissioner, which shall be vested with the jurisdiction to make assessment in accordance with the provisions of this Scheme;
(iii) assessment units, as it may deem necessary to facilitate the conduct of e-assessment, to perform the function of making assessment, which includes identification of points or issues material for the determination of any liability (including refund) under the Act, seeking information or clarification on points or issues so identified, analysis of the material furnished by the assessee or any other person, and such other functions as may be required for the purposes of making assessment;
(iv) verification units, as it may deem necessary to facilitate the conduct of e-assessment, to perform the function of verification, which includes enquiry, cross verification, examination of books of accounts, examination of witnesses and recording of statements, and such other functions as may be required for the purposes of verification.
(v) technical units, as it may deem necessary to facilitate the conduct of e-assessment, to perform the function of providing technical assistance which includes any assistance or advice on legal, accounting, forensic, information technology, valuation, audit, transfer pricing, data analytics, management or any other technical matter which may be required in a particular case or a class of cases, under this Scheme; and
(vi) review units, as it may deem necessary to facilitate the conduct of e-assessment, to perform the function of review of the draft assessment order, which includes checking whether the relevant and material evidence has been brought on record, whether the relevant points of fact and law have been duly incorporated in the draft order, whether the issues on which addition or disallowance should be made have been discussed in the draft order, whether the applicable judicial decisions have been considered and dealt with in the draft order, checking for arithmetical correctness of modifications proposed, if any, and such other functions as may be required for the purposes of review, and specify their respective jurisdiction.

(2) All communication among the assessment unit, review unit, verification unit or technical unit or with the assesses or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making an assessment under this Scheme shall be through the National e-assessment Centre.

(3) The units referred to in clauses (iii), (iv), (v) and (vi) of sub-paragraph (1) shall have the following authorities, namely:

(a) Additional Commissioner or Additional Director or Joint Commissioner or Joint Director, as the case may be;
(b) Deputy Commissioner or Deputy Director or Assistant Commissioner or Assistant Director, or Income-tax Officer, as the case may be;
(c) such other income-tax authority, ministerial staff, executive or consultant, as considered necessary by the Board.

5. Procedure for assessment:

(1) The assessment under this Scheme shall be made as per the following procedure, namely:—

(i) the National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143 of the Act;

(ii) the assessee may, within fifteen days from the date of receipt of notice referred to in clause (i), file his response to the National e-Assessment Centre;

(iii) where the assessee –

(a) has furnished his return of income under section 139 of the Actor in response to a notice issued under sub-section (1) of section 142 of the Act or sub-section (1) of section 148 of the Act, and a notice under sub-section (2) of section 143 of the Act has been issued by the Assessing Officer or the prescribed income-tax authority, as the case may be; or
(b) has not furnished his return of income in response to a notice issued under sub-section (1) of section 142 of the Act by the Assessing Officer; or
(c) has not furnished his return of income under sub-section (1) of section 148 of the Act and a notice under sub-section (1) of section 142 of the Act has been issued by the Assessing Officer,

The National e-Assessment Centre shall intimate the assessee that assessment in his case shall be completed under this Scheme.

(iv) the National e-Assessment Centre shall assign the case selected for the purposes of e-assessment under this Scheme to a specific assessment unit in any one Regional e-Assessment Centre through an automated allocation system;

(v) 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 assessee or any other person, as it may specify;
(b) conducting of certain enquiry or verification by verification unit; and
(c) seeking technical assistance from the technical unit;

(vi) where a request for obtaining further information, document or evidence from the assessee or any other person has been made by the assessment unit, the National e-Assessment Centre shall issue appropriate notice or requisition to such assessee or person, specifying a time therein, for submittingsuch information, documents or evidence;

(vii) the assessee or any other person, as the case may be, shall file his response to the notice referred to in clause (vi), within the time specified therein or such extended time as may be allowed on the basis of an application in this regard, to the National e-Assessment Centre;

(viii) where a request for conducting of certain enquiry or verification by the verification unit has been made by the assessment unit, the request shall be assigned by the National e-Assessment Centre to a verification unit in any one Regional e-Assessment Centre through an automated allocation system;

(ix) where a request for seeking technical assistance from the technical unit has been made by the assessment unit, 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;

(x) the National e-Assessment Centre shall send the report received from the verification unit or the technical unit, based on the request referred to in clause (viii) or (ix) to the concerned assessment unit;

(xi) where the assessee fails to comply with the notice referred to in clause (vi) or notice issued under sub-section (1), or with a direction issued under sub-section (2A), of section 142 of the Act, the National e-Assessment Centre shall serve upon such assessee a notice under section 144 of the Act giving him an opportunity to show-cause, on a date and time to be specified in the notice, why the assessment in his case should not be completed to the best of its judgment;

(xii) the assessee shall, within the time specified in the notice referred to in clause (xi) or such time as may be extended on the basis of an application in this behalf, file his response to the National e-Assessment Centre;

(xiii) where the assessee fails to file response to the notice referred to in clause (xi) within the time specified therein or within the extended time, if any, the National e-Assessment Centre shall intimate such failure to the assessment unit;

(xiv) the assessment unit shall, after taking into account all the relevant material available on the record make in writing, a draft assessment order or, in a case where intimation referred to in clause (xiii) is received from the National e-Assessment Centre, make in writing, a draft assessment order to the best of its judgment, either accepting the income or sum payable by, or sum refundable to, the assessee as per his return or making variation to such income or sum, and send a copy of such order to the National e-Assessment Centre;

(xv) the assessment unit shall, while making draft assessment order, provide details of the penalty proceedings to be initiated therein, if any;

(xvi) the 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, in case no variation prejudicial to the interest of assessee is proposed, 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 any variation prejudicial to the interest of assessee is proposed, by serving a notice calling upon him to show cause as to why the proposed variation should not be made; 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;

(xvii) the 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) concur with the draft assessment order and intimate the National e-Assessment Centre about such concurrence; or
(b) suggest such variation, as it may deem fit, in the draft assessment order and send its suggestions to the National e-Assessment Centre;

(xviii) the National e-Assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in sub-clause (a) or sub-clause (b) of clause (xvi), as the case may be;

(xix) the National e-Assessment Centre shall, upon receiving suggestions for variation from the review unit, assign the case to an assessment unit, other than the assessment unit which has prepared the draft assessment order, through an automated allocation system;

(xx) the assessment unit shall, after considering the variations suggested by the review unit, send the final draft assessment order to the National e-Assessment Centre;

(xxi) the National e-Assessment Centre shall, upon receiving final draft assessment order follow the procedure laid down in sub-clause (a) or sub-clause (b) of clause (xvi), as the case may be;

(xxii) the assessee may, in a case where show-cause notice has been served upon him as per the procedure laid down in sub-clause (b) of clause (xvi), furnish his response to the National e-Assessment Centre on or before the date and time specified in the notice or within such time as may be extended on the basis of an application in this behalf;

(xxiii) the National e-Assessment Centre shall, –

(a) where no response to the show-cause noticeas per clause (xxii) is received,—
- (A) in a case where the draft assessment order or the final draft assessment order is in respect of an eligible assessee and proposes to make any variation which is prejudicial to the interest of such assessee, forward the draft assessment order or final draft assessment order to such assessee; or
- (B) in any other case, finalise the assessment as per the draft assessment order or the final draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, upon 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;
(b) in any other case, send the response furnished by the assessee to the assessment unit;

(xxiv) the assessment unit shall, after taking into account the response furnished by the assessee, as referred to in sub-clause (b) of clause (xxiii), make a revised draft assessment order and send it to the National e-Assessment Centre;

(xxv) The National e-Assessment Centre shall, upon receiving the revised draft assessment order, –

(a) in case the variations proposed in the revised draft assessment order are not prejudicial to the interest of the assessee in comparison to the draft assessment order or the final draft assessment order, and –
- (A) in case the revised draft assessment order is in respect of an eligible assessee and there is any variation prejudicial to the interest of such assessee proposed in draft assessment order or the final draft assessment order, forward such revised draft assessment order to such assessee;
- (B) in any other case, finalise the assessment as per the revised draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, upon 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;
(b) in case the variations proposed in the revised draft assessment order are prejudicial to the interest of the assessee in comparison to the draft assessment order or the final draft assessment order, provide an opportunity to the assessee, by serving a notice calling upon him to show-cause as to why the proposed variation should not be made;

(xxvi) The procedure laid down in clauses (xxiii), (xxiv) and (xxv) shall apply mutatis mutandis to the notice referred to in sub-clause (b) of clause (xxv);

(xxvii) where the draft assessment order or final draft assessment order or revised draft assessment order is forwarded to the eligible assessee as per item A of sub-clause (a) of clause (xxiii) or item A of sub-clause (a) of clause (xxv), such assessee shall, within the period specified in sub-section (2) of section 144C of the Act, file his acceptance of the variations to the National e-Assessment Centre;

(xxviii) theNational e-Assessment Centre shall, –

(a) upon receipt of acceptance as per clause (xxvii); or
(b) if no objections are received from the eligible assessee within the period specified in sub-section (2) of section 144C of the Act, finalise the assessment within the time allowed under sub-section (4) of section 144C of the Act 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;

(xxix) where the eligible assessee files his objections with the Dispute Resolution Panel, the National e-Assessment Centre shall upon receipt of the directions issued by the Dispute Resolution Panel under sub-section (5) of section 144C of the Act, forward such directions to the concerned assessment unit;

(xxx) the assessment unit shall in conformity of the directions issued by the Dispute Resolution panel under sub-section (5) of section 144C of the Act prepare a draft assessment order in accordance with sub-section (13) of section 144C of the Act and send a copy of such order to the National e-Assessment Centre;

(xxxi) the National e-Assessment Centre shall, upon receipt of draft assessment order referred to in clause (xxx), finalise the assessment within the time allowed under sub-section (13) of section 144C of the Act and serve a copy of such order and notice for initiating penalty proceedings, if any, upon 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;

(xxxii) 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 the said case for such action as may be required under the Act.

[The sub-paragraph (1) of paragraph 5 has been substituted w.e.f. 17.02.2021 by the Faceless Assessment (First Amendment) Scheme, 2021 vide notification number S.O. 741(E), dated the 17th February, 2021]

(2) Notwithstanding anything contained in sub-paragraph (1), the Principal Chief Commissioner or the Principal Director General, in charge of 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, with the prior approval of the Board.

6. Penalty proceedings for non-compliance:

(1) Any unit may, in the course of assessment proceedings, 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 under Chapter XXI of the Act, against such assessee or any other person, as the case may be, to the National e-assessment Centre, if it considers necessary or expedient 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, as the case may be, calling upon him to show cause as to why penalty should not be imposed on him under the relevant provisions of 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 assessee or any other person, as the case may be, –

(a) make a draft order of penalty and send a copy of such draft to National e-assessment Centre; or
(b) drop the penalty after recording reasons, under intimation to the National e-assessment Centre.

(5) The National e-assessment Centre shall levy the penalty as per the said draft order of penalty and serve a copy of the same along with demand notice on the assessee or any other person, as the case may be, and thereafter transfer electronic records of the penalty proceedings to the Assessing Officer having jurisdiction over the said case for such action as may be required under the Act.

7. Appellate Proceedings:

An appeal against an assessment order, or penalty order made by the National e-assessment Centre under this Scheme shall lie before the Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing Officer and any reference to the Commissioner (Appeals) in any communication from the National e-assessment Centre shall mean such jurisdictional Commissioner (Appeals).

8. Exchange of communication exclusively by electronic mode:

(1) For the purposes of this Scheme, –

(a) all communications between the National e-assessment Centre and the assessee, or his authorised representative, or any other person shall be exchanged exclusively by electronic mode; and
(b) all internal communications between the National e-assessment Centre, Regional e-assessment Centres and various units shall be exchanged exclusively by electronic mode;

(2) The provisions of sub-paragraph (1) shall not apply to the enquiry or verification conducted by the verification unit in the circumstances referred to in clause (via) of Paragraph 12.

9. Authentication of electronic record:

For the purposes of this Scheme, an electronic record shall be authenticated by ––

(i) the National e-Assessment Centre by affixing its digital signature; and
(ii) the assessee or any other person, by affixing his digital signature if he is required under the Rules to furnish his return of income under digital signature, and in any other case by affixing his digital signature or under electronic verification code;

Explanation: For the purpose of this paragraph, “electronic verification code” shall have the same meaning as referred to in rule 12 of the Rules.

10. Delivery of electronic record:

(1) Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee, being the assessee, by way of-

(a) placing an authenticated copy thereof in the assessee’s registered account; or
(b) sending an authenticated copy thereof to the registered email address of the assessee or his authorised representative; or
(c) uploading an authenticated copy on the assessee’s Mobile App; and followed by a real time alert.

(2) Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee, being any other person, by sending an authenticated copy thereof to the registered email address of such person, followed by a real time alert.

(3) The Assessee shall file his response to any notice or order or any other electronic communication, under this Scheme, through his registered account, and 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.

(4) The time and place of dispatch and receipt of electronic record shall be determined in accordance with the provisions of section 13 of the Information Technology Act, 2000 (21 of 2000).

11. No personal appearance in the Centres or Units:

(1) A person shall not be required to appear either personally or through authorised representative in connection with any proceedings under this Scheme 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) In a case where a variation is proposed in the draft assessment order or final draft assessment order or revised 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 such draft assessment order or final draft assessment order or revised draft assessment order, the assessee or his authorised representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the income-tax authority in any unit under this Scheme;

[The sub-paragraph (2) of paragraph 11 has been amended w.e.f. 17.02.2021 by the Faceless Assessment (First Amendment) Scheme, 2021 vide notification number S.O. 741(E), dated the 17th February, 2021]

(3) The Chief Commissioner or the Director General, in charge of the Regional e-assessment Centre, under which the concerned unit is set up, may approve the request for personal hearing referred to in sub-paragraph (2) if he is of the opinion that the request is covered by the circumstances referred to in clause (vib) of Paragraph 12;

(3A) Where the request for personal hearing has been approved by the Chief Commissioner or the Director General, in charge of the Regional e-assessment Centre, such hearing shall be conducted exclusively through video conferencing, including use of any telecommunication application software which supports video telephony, in accordance with the procedure laid down by the Board;

(3B) Subject to the sub-paragraph (2) of paragraph (8), 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 under this Scheme, exclusively through video conferencing, including use of any telecommunication application software which supports video telephony in accordance with the procedure laid down by the Board.

(4) The Board shall establish suitable facilities for video conferencing including telecommunication application software which supports video telephony at such locations as may be necessary, so as to ensure that the assessee, or his authorised representative, or any other person referred to in sub-paragraph (2) or sub-paragraph (3) 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.

12. Power to specify format, mode, procedure and processes:

The Principal Chief Commissioner or the Principal Director General, in charge of the National e-assessment Centre shall, with the approval of the Board, lay down the standards, procedures and processes for effective functioning of the National e-assessment Centre, Regional e-assessment Centres and the unit set-up under this Scheme, in an automated and mechanised environment, including format, mode, procedure and processes in respect of the following, namely:__

(i) service of the notice, order or any other communication;
(ii) receipt of any information or documents from the person in response to the notice, order or any other communication;
(iii) issue of acknowledgment of the response furnished by the person;
(iv) provision of “e-proceeding” facility including login account facility, tracking status of assessment, display of relevant details, and facility of download;
(v) accessing, verification and authentication of information and response including documents submitted during the assessment proceedings;
(vi) receipt, storage and retrieval of information or documents in a centralised manner;
(via) circumstances in which provisions of sub-paragraph (1) of paragraph 8 shall not apply;
(vib) circumstances in which personal hearing referred to in sub-paragraph (3) of paragraph (11) shall be approved;
(vii) general administration and grievance redressal mechanism in the respective Centres and units.

Directions for the purposes of giving effect to the Faceless Assessment Scheme, 2019

The Central Government vide CBDT Notification No. 3265 dated 12^th September, 2019 as amended by Notification No. 2746 dated 13.08.2020 and Notification No. S.O. 742 dated 17.02.2021 and makes directions for the purposes of giving effect to the Faceless Assessment (Earlier E-assessment) Scheme, 2019:

In exercise of the powers conferred by sub-section (3B) of section 143 of the Income-tax Act, 1961 (43 of 1961), for the purposes of giving effect to the Faceless Assessment Scheme, 2019 made under sub-section (3A) of section 143 of the Act, the Central Government hereby makes the following directions, namely:-

1. The provisions of clause (7A) of section 2, section 92CA, section 120, section 124, section 127, section 129, section 131, section 133, section 133A, section 133C, section 134, Chapter XIV, and Chapter XXI of the Act shall apply to the assessment made in accordance with the said Scheme subject to the following exceptions, modifications and adaptations, namely:

A. (1) The assessment under this Scheme shall be made as per the following procedure, namely: —

(i) the National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143 of the Act;

(ii) the assessee may, within fifteen days from the date of receipt of notice referred to in clause (i), file his response to the National e-Assessment Centre;

(iii) where the assessee –

(a) has furnished his return of income under section 139 of the Act or in response to a notice issued under sub-section (1) of section 142 of the Act or sub-section (1) of section 148 of the Act, and a notice under sub-section (2) of section 143 of the Act has been issued by the Assessing Officer or the prescribed income-tax authority, as the case may be; or
(b) has not furnished his return of income in response to a notice issued under sub-section (1) of section 142 of the Act by the Assessing Officer; or
(c) has not furnished his return of income under sub-section (1) of section 148 of the Act and a notice under sub-section (1) of section 142 of the Act has been issued by the Assessing Officer, the National e-Assessment Centre shall intimate the assessee that assessment in his case shall be completed under this Scheme.

(v) 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 assessee or any other person, as it may specify;
(b) conducting of certain enquiry or verification by verification unit; and
(c) seeking technical assistance from the technical unit;

(vi) where a request for obtaining further information, documents or evidence from the assessee or any other person has been made by the assessment unit, 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;

(vii) the assessee or any other person, as the case may be, shall file his response to the notice referred to in clause (vi), within the time specified therein or such time as may be extended on the basis of an application in this regard, to the National e-Assessment Centre;

(xi) where the assessee fails to comply with the notice referred to in clause (vi) or notice issued under sub-section (1) of section 142 of the Act, or with a direction issued under subsection (2A) of section 142 of the Act, the National e-Assessment Centre shall serve upon such assessee a notice under section 144 of the Act giving him an opportunity to show-cause, on a date and time to be specified in the notice, why the assessment in his case should not be completed to the best of its judgment;

(xii) the assessee shall, within the time specified in the notice referred to in clause (xi) or such time as may be extended on the basis of an application in this regard, file his response to the National e-Assessment Centre;

(xiii) where the assessee fails to file response to the notice referred to in clause (xi) within the time specified in the notice or within the extended time, if any, the National e-Assessment Centre shall intimate such failure to the assessment unit;

(xv) the assessment unit shall, while making draft assessment order, provide details of the penalty proceedings to be initiated therein, if any;

(a) finalise the assessment, in case no variation prejudicial to the interest of assessee is proposed, 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 any variation prejudicial to the interest of assessee is proposed, by serving a notice calling upon him to show-cause as to why the proposed variation should not be made; 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;

(xvii) the 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) concur with the draft assessment order and intimate the National e-Assessment Centre about such concurrence; or
(b) suggest such variation, as it may deem fit, in the draft assessment order and send its suggestions to the National e-Assessment Centre;

(xviii) the National e-Assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in sub-clause (a) or sub-clause (b) of clause (xvi), as the case may be;

(xx) the assessment unit shall, after considering the variations suggested by the review unit, send the final draft assessment order to the National e-Assessment Centre;

(xxi) the National e-Assessment Centre shall, upon receiving final draft assessment order,follow the procedure laid down in sub-clause (a) or sub-clause (b) of clause (xvi), as the case may be;

(xxiii) the National e-Assessment Centre shall, –

(a) where no response to the show-cause noticeas per clause (xxii) is received,—
- (A) in a case where the draft assessment order or the final draft assessment order is in respect of an eligible assessee and proposes to make any variation which is prejudicial to the interest of such assessee, forward the draft assessment order or final draft assessment order to such assessee; or
- (B) in any other case, finalise the assessment as per the draft assessment order or the final draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, upon 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;
(b) in any other case, send the response furnished by the assessee to the assessment unit;

(xxv) The National e-Assessment Centre shall, upon receiving the revised draft assessment order, –

(a) in case the variations proposed in the revised draft assessment order are not prejudicial to the interest of the assessee in comparison to the draft assessment order or the final draft assessment order, and –
- (A) in case the revised draft assessment order is in respect of an eligible assessee and there is any variation prejudicial to the interest of such assessee proposed in draft assessment order or the final draft assessment order, forward such revised draft assessment order to such assessee;
- (B) in any other case, finalise the assessment as per the revised draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, upon 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;
(b) in case the variations proposed in the revised draft assessment order are prejudicial to the interest of the assessee in comparison to the draft assessment order or the final draft assessment order, provide an opportunity to the assessee, by serving a notice calling upon him to show-cause as to why the proposed variation should not be made;

(xxvi) The procedure laid down in clauses (xxiii), (xxiv) and (xxv) shall apply mutatis mutandis to the notice referred to in sub-clause (b) of clause (xxv);

(xxviii) the National e-Assessment Centre shall, –

(a) upon receipt of acceptance as per clause (xxvii); or
(b) if no objections are received from the eligible assessee within the period specified in sub-section (2) of section 144C of the Act, finalise the assessment within the time allowed under sub-section (4) of section 144C of the Act 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;

[The sub-paragraph (1) of item A of Clause 1 has been substituted w.e.f. 17.02.2021 vide notification number S.O. 742(E), dated the 17th February, 2021]

B. (1) A person shall not be required to appear either personally or through authorised representative in connection with any proceedings under the said Scheme before the income-tax authority at the National e-assessment Centre or Regional e-assessment Centre or any unit set up under the said Scheme.

[The sub-paragraph (2) of item B of Clause 1 has been amended w.e.f. 17.02.2021 vide notification number S.O. 742(E), dated the 17th February, 2021]

(3B) Subject to the sub-paragraph (2) of paragraph (8) of the said Scheme, 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 under the said Scheme, exclusively through video conferencing, including use of any telecommunication application software which supports video telephony in accordance with the procedure laid down by the Board.

(4) The Board shall establish suitable facilities for video conferencing including telecommunication application software which supports video telephony at such locations as may be necessary, so as to ensure that the assessee, or his authorised representative, or any other person referred to in subparagraph (2) or sub-paragraph (3B) is not denied the benefit of the said 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.

2. The provisions of section 246A of the Act shall apply to appealable orders arising out of assessments made and penalty imposed in accordance with the said Scheme subject to the following, exceptions, modifications and adaptations, namely: –

“An appeal against an assessment order, or penalty order made by the National e-assessment Centre under the said Scheme shall lie before the Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing Officer and any reference to the Commissioner (Appeals) in any communication from the National e-assessment Centre shall mean such jurisdictional Commissioner (Appeals).”.

3. The provisions of section 140, section 142 and section 282A of the Act shall apply to assessments made in accordance with the said Scheme subject to the following, exceptions, modifications and adaptations, namely: –

“an electronic record shall be authenticated by ––

(i) the National e-Assessment Centre by affixing its digital signature; and
(ii) the assessee or any other person, by affixing his digital signature if he is required under the Rules to furnish his return of income under digital signature, and in any other case by affixing his digital signature or under electronic verification code;

Explanation: For the purpose of this paragraph, “electronic verification code” shall have the same meaning as referred to in rule 12 of the Rules.”

4. The provisions of Chapter XXI of the Act shall apply to penalties imposable in accordance with the said Scheme subject to the following, exceptions, modifications and adaptations, namely: –

“(1) Any unit may, in the course of assessment proceedings, for non-compliance of any notice, direction or order issued under the said Scheme on the part of the assessee or any other person, send recommendation for initiation of any penalty proceedings under Chapter XXI of the Act, against such assesse or any other person, as the case may be, to the National e-assessment Centre, if it considers necessary or expedient to do so.

(4) The said unit shall, after taking into consideration the response furnished by the assesse or any other person, as the case may be, –

a. make a draft order of penalty and send a copy of such draft to National e-assessment Centre; or
b. drop the penalty after recording reasons, under intimation to the National e-assessment Centre.

5. The provisions of section 282, section 283 and section 284 of the Act shall apply to assessment made in accordance with the said Scheme subject to the following, exceptions, modifications and adaptations, namely: –

“A (1) Every notice or order or any other electronic communication under the said Scheme shall be delivered to the addressee, being the assessee, by way of-

(a) placing an authenticated copy thereof in the assessee’s registered account; or
(b) sending an authenticated copy thereof to the registered email address of the assessee or his authorised representative; or
(c) uploading an authenticated copy on the assessee’s Mobile App; and followed by a real time alert.

(2) Every notice or order or any other electronic communication under the said Scheme shall be delivered to the addressee, being any other person, by sending an authenticated copy thereof to the registered email address of such person, followed by a real time alert.

(3) The Assessee shall file his response to any notice or order or any other electronic communication, under the said Scheme, through his registered account, and 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.

(4) The time and place of dispatch and receipt of electronic record shall be determined in accordance with the provisions of section 13 of the Information Technology Act, 2000 (21 of 2000).

B. The Principal Chief Commissioner or the Principal Director General, in charge of the National e-assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functioning of the National e-assessment Centre, Regional e-assessment Centres and the unit set-up under the said Scheme, in an automated and mechanised environment, including format, mode, procedure and processes in respect of the following, namely:__

(i) service of the notice, order or any other communication;

(ii) receipt of any information or documents from the person in response to the notice, order or any other communication;

(iii) issue of acknowledgment of the response furnished by the person;

(iv) provision of “e-proceeding” facility including login account facility, tracking status of assessment, display of relevant details, and facility of download;

(v) accessing, verification and authentication of information and response including documents submitted during the assessment proceedings;

(vi) receipt, storage and retrieval of information or documents in a centralised manner;

(via) circumstances in which provisions of sub-paragraph (1) of paragraph 8 of the said Scheme shall not apply;

(vib) circumstances in which personal hearing referred to in sub-paragraph (3) of paragraph (11) of the said Scheme shall be approved;

(vii) general administration and grievance redressal mechanism in the respective Centres and units.