Overview
Section 157A of the Income Tax Act, 1961, was introduced to empower the Central Government to create a faceless mechanism for:
- Rectification of mistakes apparent from the record
- Carrying out amendments
- Issuing notices or intimations
This provision aligns with the broader aim of the Income Tax Act to reduce human interface and bring transparency, efficiency, and taxpayer-friendly procedures to tax administration.
Key Features
1. Faceless Rectification
- The Central Government may notify a scheme(published in the Official Gazette) enabling rectification of errors that are apparent from the record.
- The scheme ensures that such rectification proceedings are conducted electronically, i.e., without direct interaction between taxpayers and tax officials.
- This covers rectifications under Section 154, including amendments and errors that are clear, self-evident, and not debatable based on existing records.
2. Amendments
- The faceless mechanism also extends to other amendments under Section 155.
- This streamlines the process for making necessary changes or corrections in assessment records.
3. Issuance of Notices or Intimations
- Notices for demands (under Section 156) or intimations regarding loss (under Section 157) can also be issued facelessly.
- All such communications are generated and served electronically—either to the registered account, registered e-mail address, or through mobile app notifications, ensuring real-time digital delivery.
4. Centralized Electronic Administration
- The scheme establishes centralized units and centersfor the management of faceless proceedings.
- All submissions, notices, and responses are exchanged through digital platforms, generally involving the National Faceless Assessment Centre (NFAC) or similar units.
5. Procedural Safeguards
- Taxpayers are provided an opportunity to present their case electronically before any rectification is finalized.
- The assessing officer (AO) must serve notices electronically and allow the taxpayer to respond before deciding on any adverse amendments or rectifications.
Applicability & Process
| ASPECT | FACELESS MECHANISM (SECTION 157A) |
| Rectification | Section 154 – Online correction of mistakes apparent from record |
| Amendments | Section 155 – Electronic amendment of assessment records as required |
| Notice of Demand | Section 156 – E-notices for tax demand communicated digitally |
| Intimation of Loss | Section 157 – E-intimations for loss, digitally served |
| Communication | All via registered account/email/mobile app, no personal interaction |
| Appeal/Response | Opportunity to electronically respond/appeal allowed before final order |
Objectives and Benefits
- Transparency and Uniformity: Eliminates subjective discretion and arbitrary actions by tax officers.
- Taxpayer Convenience: Allows responses and rectification applications to be made online, saving time and resources.
- Efficient and Secure: Timely resolution and documentation of all communications via secure digital channels.
Legal Backing
Section 157A was inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, effective from 1st November 2020. The government has the authority to notify schemes, specify exceptions, and adapt procedures, as necessary, for operationalizing the faceless process.
