Faceless Assessment Scheme

E-assessment Scheme 2019 was introduced vide two notifications, i.e. 61/2019 and 62/2019. Recently, on 13th August 2020, the Prime Minister, Shri Narendra Modi launched a new platform ‘Transparent Taxation- Honoring the Honest’. The new platform announces Faceless Assessment Scheme, faceless appeal and taxpayers charter. Notably, the faceless assessment and the taxpayers charter is given immediate effect. However, the faceless appeal will be effective from 25th September 2020. Accordingly, two notification, i.e. notification no. 60/2020 and notification no. 61/2020 both dated 13th August 2020 substituted the e-assessment scheme to the Faceless Assessment Scheme. The same is taken up and briefly explained in the current article.

The structural framework of faceless assessment

Following table explains the number of units involved in the faceless assessment and its respective working-

Unit	Working of the unit
National e-Assessment Centre (shortly known as NeAC)	It will facilitate and control the entire faceless assessment.
Regional e-Assessment Centre (shortly known as ReAC)	It is situated in different States. Via automated allocation system, NeAC shall allocate the cases to ReAC.
Assessment Unit (shortly known as AU)	AU shall carry out the Assessment of the selected case.
Verification Unit (shortly known as VU)	It will perform the verification functions like cross verification, recording of the statement, an examination of books of accounts etc.
Technical Unit (shortly known as TU)	It will provide technical assistance like advice on accounting or legal or forensic or information technology or transfer pricing etc.
Review Unit (shortly known as RU)	It will review the draft assessment order.

The process adopted for faceless assessment

The faceless assessment will work as follows-

Issuance of the notice and reply thereon-

On selection of the case for assessment, the National e-Assessment Centre shall serve the notice to the assesses. In-turn, the assesses, needs to reply, within a period of fifteen days from the date of receipt of the notice.

Allocation of the case-

The case shall be allocated via the automated allocation system to an Assignment Unit in any one Regional e-Assessment Centre

Action by an Assignment Unit-

Post allocation of the case, the Assignment unit may request the National e-Assessment Centre to-

Obtaining additional information or document from the assessee or any other person, or
Conducting certain inquiry or verification by the Verification Unit, or
Getting technical assistance from the Technical Unit.

Making of draft assessment order-

The Assignment Unit will prepare a draft assessment order based on the information and details/ inputs received. In case the penalty proceedings are to be initiated, the Assignment Unit should provide the details of the same in the draft assessment order.

Assessing the draft assessment order-

The National e-Assessment Centre shall study/ review the draft assessment order and take any of the following action-

Finalize the assessment-

If satisfied, the National e-Assessment Centre can finalize the assessment as per the draft assessment order. Accordingly, the assesses will be served a copy of assessment order, and if applicable, the notice initiating the penalty proceedings shall also be served. Further, based on the assessment, the assesses will also be served a demand notice specifying the total sum payable or refund amount due.

Provide an opportunity of being heard-

In case a modification is proposed, the assesses will be provided with an opportunity of being heard.

Assign the draft assessment order to a review unit-

Through an automated allocation system, the National e-Assessment Centre can assign the draft assessment order to a review unit. The order can be assigned to a review unit in any one Regional e-Assessment Centre. If the draft assessment order is finalized, no further action is required. However, the above process will continue based on the reply filed by the assesses or based on the suggestions given by the Review Unit. Markedly, the above process shall continue until the draft assessment order gets finalized.

Action post finalization of the assessment order-

Once the assessment order is finalized, the National e-Assessment Centre will transfer all the electronic records to the Assessing Officer having jurisdiction over the assesses.

Cases not covered under Faceless Assessment

The assessment of the following cases is kept outside the purview of the Faceless Assessment-

The cases related to international tax.
The cases related to the Search Assessment under section 153A.

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Frequently Asked Questions

Common questions about Faceless Assessment Scheme Overview for Transparent Taxation.

The faceless assessment scheme is a new initiative launched by the Indian government to make the income tax assessment process more transparent, efficient, and impersonal. It involves a team-based approach where different units handle specific aspects of the assessment without face-to-face interaction with the taxpayer.

The various units involved in the faceless assessment process are the National e-Assessment Centre (NeAC), Regional e-Assessment Centres (ReACs), Assessment Units (AUs), Verification Units (VUs), Technical Units (TUs), and Review Units (RUs). Each unit has a specific role to play in the assessment process.

The faceless assessment process begins with the NeAC serving a notice to the taxpayer. The case is then allocated to an AU through an automated system. The AU may seek additional information, verification, or technical assistance from other units. Based on the inputs received, the AU prepares a draft assessment order, which is reviewed by the NeAC and finalized or sent for further proceedings.

The NeAC plays a central role in facilitating and controlling the entire faceless assessment process. It serves notices, allocates cases to ReACs, reviews draft assessment orders, finalizes assessments, and transfers electronic records to the jurisdictional Assessing Officer.

If the NeAC proposes modifications to the draft assessment order, the taxpayer is provided with an opportunity to be heard before the order is finalized. This ensures that the taxpayer's rights are upheld, and they have a chance to present their case.

Cases related to international tax and search assessments under Section 153A of the Income Tax Act are currently not covered under the faceless assessment scheme.

The faceless assessment scheme aims to make the income tax assessment process more transparent, efficient, and impersonal by eliminating face-to-face interaction between the taxpayer and the tax authorities. It is expected to reduce the potential for personal bias or corruption in the assessment process.

The automated allocation system is responsible for allocating cases to different units, such as AUs and RUs, in a random and impartial manner. This helps ensure fairness and objectivity in the assessment process.

The Review Unit (RU) is responsible for reviewing the draft assessment order prepared by the Assessment Unit (AU). Based on its review, the RU may suggest modifications or provide additional inputs to the NeAC for finalizing the assessment.

The faceless assessment scheme benefits taxpayers by promoting transparency, reducing the potential for personal bias or corruption, and ensuring a more efficient and objective assessment process. It also aims to enhance the overall taxpayer experience by making the assessment process more convenient and accessible.