Faceless Approval or Registration [Section 293D]

Section 293D empowers the Central Government to implement a faceless (digital) scheme for granting approvals or registrations under the Income Tax Act, aiming to enhance efficiency, transparency, and accountability. Here’s a detailed breakdown:

1. Key Features of the Scheme

The faceless approval/registration scheme is designed to:

1. Eliminate Physical Interface: Minimize direct interaction between taxpayers and tax authorities through digital processes .
2. Optimize Resources: Use centralized teams (e.g., technical units, verification units) for specialized processing .
3. Dynamic Jurisdiction: Cases are assigned randomly to avoid bias, with approvals granted by a team-based systemrather than individual officers .

2. Scope of Applicability

• Types of Approvals/Registrations:
  • Charitable trust registrations (Section 12AA).
  • Tax exemptions (e.g., Section 10(23C), 80G).
  • Approvals for international transactions (Section 92CA) .
• Exclusions: Certain high-risk cases (e.g., search assessments) may remain outside this scheme .

3. Procedure for Faceless Approvals

1. Application Submission: Taxpayers submit requests via the Income Tax e-filing portalwith digital signatures/EVC .
2. Automated Allocation: Cases are assigned to specialized units (e.g., assessment, technical, verification) through an AI-driven system.
3. Review & Decision:
   • A review unitvalidates the approval draft.
   • Taxpayers may receive notices for additional details electronically .
4. Final Order: Issued digitally with a Document Identification Number (DIN).

4. Legal Provisions & Modifications

• Section 293D(2): Allows the government to modify or exemptexisting provisions of the Act to implement the scheme (e.g., waiving physical hearings) .
• Sunset Clause: Directions under this section cannot be issued after March 31, 2022, but existing schemes remain valid .

5. Benefits & Challenges

• Pros:
  • Transparency: Reduced discretion and corruption risks .
  • Faster Processing: Automated workflows expedite approvals .
• Cons:
  • Technical Glitches: E-filing portal issues may delay submissions .
  • Limited Human Intervention: Complex cases may lack nuanced handling .

6. Judicial & Administrative Safeguards

• Appeals: Taxpayers can challenge approvals/denials via the e-Appeal portal.
• Parliamentary Oversight: Notifications under Section 293D must be tabled in both Houses of Parliament.

7. Example Scenario

A charitable trust applies for registration under Section 12AA:

1. Submits Form 10A online with supporting documents.
2. The case is assigned to a faceless assessment unitin Bengaluru.
3. A technical unitverifies compliance with charitable activity norms.
4. Approval is granted within 1 monthvia the e-filing portal

Note: Always verify the latest CBDT circulars for updates to the faceless scheme.