Faceless Assessment
Introduction
Faceless Assessment ensures electronic processing of Scrutiny Assessments (Section 143(3)), Best Judgment Assessments (Section 144), and Reassessments (Section 147). This eliminates physical interaction between taxpayers and tax authorities, except for cases excluded from faceless assessment.
Scope of Faceless Assessment
All assessments, reassessments, or recomputations under Sections 143(3), 144, and 147 are conducted facelessly, except in cases:
- Assigned to Central Charges or International Taxation Units.
- Where pendency could not be created on ITBA because of technical reasons or cases not having a PAN, as the case may be;
Authorities Involved
- National Faceless Assessment Centre (NFAC)– It facilitates the conduct of faceless assessment proceedings in a centralised manner.
- Assessment Units (AU)– It shall conduct a faceless assessment by identifying issues, determining liability/refund, seeking clarifications, and analysing information.
- Verification Units (VU)– It shall verify through enquiry, cross-checks, examination of books, witnesses, and statements, or other required functions
- Technical Units (TU)– It shall provide technical assistance on legal, accounting, forensic, IT, valuation, transfer pricing, data analytics, management, or treaty matters as required.
- Review Units (RU)– It shall review the Income Determination Proposal by verifying evidence, facts, legal points, proposed additions/disallowances, arithmetic accuracy, and other required aspects.
Procedure for Faceless Assessment
- Case Assignment– NFAC assigns cases to an Assessment Unit.
- Notice Issuance– Notices under Section 143(2) or 142(1) are issued electronically.
- Taxpayer Response– Taxpayers file replies online.
- Verification and Technical Assistance– Requests for documents, inquiries, or expert opinions are handled digitally.
- Draft Assessment Order– If variations are proposed, a show-cause notice is issued.
- Review Process– Orders undergo review before finalization.
- Final Assessment– NFAC issues the order, along with demand/refund notices.
Communication and Personal Hearings
- All notices, responses, and orders are exchanged electronically.
- Taxpayers may request a virtual hearing if variations are proposed.
- The system uses video conferencing or telephony for hearings.
Special Audit or Inventory Valuation
- If required, NFAC refers cases to jurisdictional authorities for Special Audit (Section 142(2A)) or Inventory Valuation.
Transfer of Cases
NFAC may transfer cases to jurisdictional Assessing Officers if faceless processing is impractical.