Faceless Appeals Before Commissioner (Appeals) – Notification No. 139/2021

The Faceless Appeal Scheme, 2021, introduced via Notification No. 139/2021 dated 28th December 2021, replaced the earlier Faceless Appeal Scheme, 2020. This scheme aims to eliminate physical interaction between taxpayers and tax authorities, ensuring transparency, efficiency, and accountability in the appellate process under the Income Tax Act, 1961 .

1. Key Features of the Faceless Appeal Scheme, 2021

1. Structure of Faceless Appeals

• National Faceless Appeal Centre (NFAC): Acts as the nodal agencyfor communication and case allocation .
• Appeal Units (AUs): Each unit consists of a single Commissioner (Appeals)[CIT(A)] and supporting staff .
• Automated Allocation: Appeals are randomly assignedto AUs via an algorithm-based system to prevent bias.

2. Mandatory Personal Hearing (If Requested)

• Unlike the 2020 scheme, personal hearings must be grantedif requested by the appellant .
• Conducted via video conferencing (VC)to maintain a faceless process .

3. Electronic Communication & Paperless Process

• All notices, submissions, and orders are exchanged digitallythrough the Income Tax e-filing portal .
• Authenticationvia digital signatures or Electronic Verification Code (EVC) .

4. Procedure for Disposal of Appeals

1. Case Assignment: NFAC allocates appeals to CIT(A) via an automated system .
2. Notice Issuance: Appellant receives a notice to file submissions within a specified time .
3. Additional Evidence:

• • Can be submitted under Rule 46Aif exceptional circumstances exist.
  • AO is given a chance to respond before admission .

4. Draft Order: CIT(A) prepares an order and sends it to NFAC for communication .
5. Final Order: NFAC issues the order to the appellant and AO .

5. Penalty & Rectification Proceedings

• Penalty: CIT(A) can directly issue penalty notices without prior review .
• Rectification: Mistakes can be rectified within 6 monthsvia an application to NFAC .

6. No Multiple Reviews (Unlike 2020 Scheme)

• The 2020 schemerequired multiple AUs to review draft orders, causing delays.
• The 2021 schemeallows single CIT(A) disposal, improving efficiency .

Comparison with the 2020 Scheme