CBDT NOTIFIES FACELESS PENALTY AMENDMENT SCHEME, 2022
CBDT has notified the amendment in the faceless penalty scheme, allowing mandatory personal hearing through electronic mode to any taxpayer who has sought a hearing.
The amendment has omitted the Regional Faceless Penalty Centre from the Faceless Penalty Scheme and provides that electronic records shall be authenticated by the National Faceless Penalty Centre and even hearing should be done via them and not regional faceless penalty centre.
The Faceless Penalty (Amendment) Scheme, 2022, notified on Friday says that such hearing will be held exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony.
What is Faceless Assessment Scheme?
The Faceless Assessment Scheme that was launched by the Indian Government on the 7th of October (2019) is a huge step forward in the direction of achieving a more digitally and technically empowered functionality of the government authorities and department. With regard to the revenue and income tax department, the assessment process for filing income tax was previously quite prolonged and required the physical presence of the individual. However, under this scheme, the Individual will be able to carry out the assessment process digitally and in a much-fast-tracked manner. The Faceless Appeal Scheme has been notified in continuation of this scheme on 25th September (2020).
Faceless Assessment Scheme Focuses
- On No human interface
- Eased compliance for taxpayers
- Efficiency and transparency
- Quality of assessment improved
- Fast-tracking of disposal of disputes and cases
- Specialization in functionality
Features Of Faceless Assessment Scheme:
- National E-Assessment Center (‘NEAC’) will be acting as a nodal agency and a single point of contact and facilitator of all interaction between the taxpayer and the Income-tax authorities.
- Regional E-Assessment Centers (‘REAC’)– Assessment proceedings will be carried out by this agency with support from various units such as the Assessment Unit, Verification Unit, Technical Unit, Review Unit.
- All written submissions to the income tax authorities will happen through virtual and digital means.
- From the date of 13th of August (2020), all assessment orders including those for ongoing assessments are passed by NEAC under this particular scheme, except:- Assessment Orders (cases assigned to central charges) and Assessment Orders (cases assigned to international tax charges)
- Those assessment orders which are not passed in accordance with this scheme are to be treated as non-est and are deemed to not have passed ever.
- The proceedings before the Dispute Resolution Panel (‘DRP’) would also become faceless as provisioned by the faceless assessment scheme of the government.
- Under this scheme, personal appearances for hearing are prohibited or not required. The tax authorities lay down standards, procedures, and processes, with approval from CBDT
- Certain key functions of taxation and other laws (Relaxation and Amendment of Certain Provisions Act, 2020,) are provisioned to be carried out in a faceless manner by NEAC and These include – Reassessment proceedings, Approvals, Registration, Revision, Rectification, Transfer Pricing, stay of demand and tax recovery, Appeal efforts to appellate orders, TDS Proceedings, Application for NIL or lower tax withholding certificate prosecutions.
MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) New Delhi, the 27th May, 2022
Notification No. 54/2022-Income Tax
S.O. 2425(E).— In exercise of the powers conferred by sub-section (2A) of section 274 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme to amend the Faceless Penalty Scheme, 2021, namely:__
1. Short title and commencement.––(1) This Scheme may be called the Faceless Penalty (Amendment) Scheme, 2022.
(2) It shall come into force on the date of its publication in the Official Gazette. 2. In the Faceless Penalty Scheme, 2021,––
(i) in paragraph 4,––
(A) in sub-paragraph (1),––
(I) in clause (i), the words ―and vest it with the jurisdiction to impose penalty in accordance with the provisions of this Scheme” shall be omitted;
(II) clause (ii) shall be omitted;
(III) in clause (iii), for the words ―as may be required for the purposes of imposing penalty”, the words ―as may be required for the purposes of imposing penalty and the term ―penalty unit”, wherever used in this Scheme, shall refer to an Assessing Officer having powers so assigned by the Board” shall be substituted;
(IV) in clause (iv), for the words ―and such other functions as may be required for the purposes of review, and specify their respective jurisdiction”, the words ―and such other functions as may be required for the purposes of review and the term ―penalty review unit”, wherever used in this Scheme, shall refer to an Assessing Officer having powers so assigned by the Board” shall be substituted;
(B) in sub-paragraph (4), the words ―the Regional Faceless Penalty Centres,”, ―Regional Faceless Assessment Centre,” and ―Regional Faceless Penalty Centre,” shall be omitted;
(ii) in paragraph 5, in sub-paragraph (1),––
(A) in clause (ii), the words ―in any one of the Regional Faceless Penalty Centres” shall be omitted;
(B) for the clauses (xv) to (xxii), the following clauses shall be substituted, namely:––
(xv) the penalty unit shall, after considering the material on record including response furnished, if any, as referred to in clauses (viii), (x) and (xii) or report, if any, as referred to in clause (xiv), propose for,––
(a) imposition of the penalty and prepare a penalty imposition proposal for imposition of such penalty;
(b) non-imposition of the penalty, for reasons to be recorded in writing,
and send the penalty imposition proposal or reasons, as the case may be, to the National Faceless Penalty Centre;
(xvi) the National Faceless Penalty Centre, in accordance with the guidelines issued by the Board, may,––
(a) in a case where imposition of penalty has been proposed, convey to the penalty unit to pass the penalty order as per penalty imposition proposal referred to in sub-clause (a) of clause (xv); or
(b) in a case where non-imposition of penalty has been proposed, convey to the penalty unit to drop the penalty proceedings under intimation to the assessee or any other person, as the case may be; or
(c) assign the case to a penalty review unit through an automated allocation system, for conducting review of such proposal or reasons, as the case may be
(xvii) the penalty unit shall, in the case referred to in sub-clause (a) of clause (xvi), pass the order imposing penalty and serve the same on the assessee through the National Faceless Penalty Centre;
(xviii) the penalty unit shall, in the case referred to in sub-clause (b) of clause (xvi), drop the penalty proceedings and send the intimation to the assessee through the National Faceless Penalty Centre;
(xix) the penalty review unit shall review the penalty imposition proposal or reasons for non-imposition of penalty, as referred to in sub-clause (c) of clause (xvi), whereupon it may concur with, or suggest modification to, such proposal or reasons, as the case may be, and prepare a review report and send such report to the National Faceless Penalty Centre;
(xx) the National Faceless Penalty Centre shall, upon receiving the review report under clause (xix), forward the same to the penalty unit which had proposed the penalty imposition proposal or reasons for non-imposition of penalty, as the case may be;
(xxi) the penalty unit shall, after considering such review report, accept or reject some or all of the modifications proposed therein and after recording reasons in case of rejection of such modifications, pass the order imposing penalty or drop the penalty proceedings, as the case may be, and serve the order imposing penalty or intimation for dropping penalty proceedings, as the case may be, on the assessee through the National Faceless Penalty Centre;
(xxii) where an order imposing penalty or intimation for dropping penalty, as the case may be, has been passed, the penalty unit shall send a copy of such order, or intimation for dropping penalty to the income-tax authority, referred to in clause (i), through the National Faceless Penalty Centre, for further action as may be required under the Act.”