Faceless Inquiry or Valuation Scheme, 2022

Faceless Inquiry or Valuation Scheme, 2022

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Faceless Inquiry or Valuation Scheme, 2022

Central Board of Direct Taxes (CBDT) vide Notification No. 19/2022 in S.O. 1468(E) dated 30th March 2022 notified Faceless Inquiry or Valuation Scheme, 2022 to introduce the Artificial Intelligence for Assessment Proceedings under section 142 of the Income Tax Act, 1961. In this article, we will look at the scheme in detail.

Know more about the e-Assessment of Income Escaping Assessment Scheme, 2022

Faceless Inquiry or Valuation Scheme, 2022

The Faceless Inquiry or Valuation Scheme, 2022, covers the following:

  • Issuance of notice under section 142(1) of the Income Tax Act
  • Inquiring be before assessment under section 142(2) of the Income Tax Act;
  • Directing the assessee to have his accounts audited under section 142(2) of the Income Tax Act
  • Valuation Officer estimating the value of any asset, property, or investment under section 142A of the Income Tax Act

As per the scheme, making inquiries before assessment, directing the assessee to get his accounts audited, and estimating the value of any asset, property, or investment by a Valuation Officer as per the Income Tax Act, shall be in a faceless manner, through automated allocation.

“Automated allocation” means an algorithm for randomized allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, to optimize the use of resources.

Section 142B of the Income Tax Act

Section 142B of the Income Tax Act empowers CBDT to notify a Scheme for the following:

  • issuing notice under section 142(1), or
  • inquiring about assessment under section 142(2), or
  • directing the assessee to get his accounts audited under section 142(2A), or

estimating the value of any asset, property, or investment by a Valuation Officer under section 142A

to impart greater efficiency, transparency, and accountability by—

(i) eliminating the interface between the income-tax authority and the assessee or any other person, to the extent technologically feasible;

(ii) optimizing utilization of the resources through economies of scale and functional specialization;

(iii) introducing a team-based exercise of powers and performance of functions by two or more income-tax authorities, concurrently, in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases, with dynamic jurisdiction.

Further, section 142B provides that no direction shall be issued after the 31st day of March 2022.

The official notification about the CBDT Faceless Inquiry or Valuation Scheme, 2022 is attached here for reference:

notification-19-2022

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