Faceless Penalty (Amendment) Scheme, 2022
Faceless Penalty (Amendment) Scheme, 2022
The Central Board of Direct Taxes (CBDT) has notified Faceless Penalty (Amendment) Scheme, 2022 amending the provisions of the Faceless Penalty Scheme 2021 with effect from 27-05-2022. The 7 major changes introduced by the Amendment Scheme have been discussed in this article.
Faceless Jurisdiction of Income-tax Authorities Scheme 2022
Synopsis of Faceless Penalty (Amendment) Scheme, 2022
This new scheme is notified by the CBDT by exercising the powers conferred to it under section 274(2A) of the Income-tax Act, 1961.
- Regional Faceless Penalty Centers (RFPC) removed from the Scheme
- Penalty Units and Penalty Review Units shall refer to Assessing Officer
- Penalty Imposition Proposal replaces Draft Order
- Penalty Imposition Proposal to be examined as per Board’s guidelines
- Provisions for Rectification Proceedings omitted
- Authentication of electronic records
- Mandatory Personal Hearing if requested
CBDT notifies Non-Fungible Token (NFT) as Virtual Digital Assets
Regional Faceless Penalty Centers omitted
The Faceless Penalty (Amendment) Scheme, 2022 has removed the Regional Faceless Penalty Centers (RFPC) from the Faceless Penalty Scheme, 2021.
- RFPC was responsible to facilitate faceless penalty proceedings as per the scheme.
- CBDT announced that References to RFPC wherever occurred in the scheme have been omitted.
Penalty Units and Penalty Review Units shall mean Assessing Officer
The CBDT has specified that the term ‘Penalty Unit’ or ‘Penalty Review Unit’, wherever used in the Faceless Penalty Scheme 2021, shall refer to an Assessing Officer. Such AO has powers as assigned by the CBDT.
Draft Order’ replaced with ‘Penalty Imposition Proposal’
- Instead of preparing a draft order for the imposition of a penalty, the penalty unit shall prepare a penalty imposition proposal for the imposition of a penalty under the new ac, 2022.
Rectification Proceedings Omitted
The Faceless Penalty Scheme 2021 allowed the National Faceless Penalty Centre to rectify any mistake which is apparent from the record under this scheme. Application for rectification of mistake was allowed to be filed by the following persons:
- Assessee or any other person
- Penalty unit, which prepared the order
- Penalty review unit, which reviewed the order
- Income-tax authority
National Faceless Assessment Centre
Faceless Penalty (Amendment) Scheme, 2022 has completely omitted the provisions related to the rectification of penalty orders for rectifying any mistake apparent from records.
Penalty Imposition Proposal to be examined as per Board’s guidelines
As per the Amendment Scheme, 2022, the National Faceless Penalty Centre shall examine the penalty imposition proposal in accordance with the guidelines issued by the CBDT instead of the earlier parameter of risk management strategy.
Authentication of Electronic Records
Earlier, NFPC was required to authenticate any electronic record by digital signature. Now the same needs to be authenticated by the National Faceless Penalty Centre by way of electronic communication.
However, as per the amended scheme, the penalty unit or the penalty review unit or technical unit, or the verification unit is also required to authenticate the electronic records and shall authenticate any electronic record by affixing a digital signature.
Assessee or any other person shall continue to authenticate the electronic records by digital signature or EVC.
Mandatory Personal Hearing if requested
The pre-amended Faceless Penalty Scheme provides for approval of the request for a personal hearing by the Chief Commissioner or Director-General. The power to approve the request was at their discretion.
Now, it is mandatory to provide for the opportunity of a personal hearing if the same is requested.
The official Notification pertaining to the Faceless Penalty (Amendment) Scheme, 2022 is attached here for reference:
Faceless Penalty (Amendment) Scheme, 2022