Faceless Assessment [Section 144B]

Section 144B introduces a technology-driven, faceless assessment scheme to eliminate human interface, enhance transparency, and streamline tax administration. Below is a detailed breakdown of its provisions, structure, and procedural framework:

1. Key Objectives of Faceless Assessment

• Transparency: Eliminate direct interaction between taxpayers and tax officers to reduce bias and corruption.
• Efficiency: Expedite assessments through automated case allocation and team-based scrutiny.
• Uniformity: Standardize procedures across India using dynamic jurisdiction.

2. Structure of Faceless Assessment

The scheme operates through specialized units:

1. National e-Assessment Centre (NeAC): Central hub for case allocation and coordination.
2. Regional e-Assessment Centres (ReACs): Handle regional assessments.
3. Functional Units:
   • Assessment Units: Analyze returns and draft orders.
   • Verification Units: Conduct inquiries and cross-verify data.
   • Technical Units: Provide expert advice (e.g., transfer pricing, forensic analysis).
   • Review Units: Ensure draft orders comply with laws and precedents.

3. Procedural Flow

1. Case Selection: NeAC selects cases based on risk parameters and issues notices under Section 143(2).
2. Response Submission: Taxpayers must reply within 15 daysvia the e-filing portal.
3. Team-Based Scrutiny:
   • Assessment Unit may request additional documents or technical assistance.
   • Verification Unit validates evidence (e.g., bank statements).
4. Draft Order: Prepared by Assessment Unit and reviewed by Review Unit.
5. Show-Cause Notice: Issued if modifications are proposed; taxpayers get 7–15 daysto respond.
6. Final Order: NeAC issues the order electronically, with details of penalties or refunds.

4. Exclusions from Faceless Assessment

Certain cases are exempted and handled by jurisdictional officers:

• International tax cases.
• Central Charges(e.g., sensitive investigations).
• Cases with technical constraints(e.g., missing PAN, de novo assessments).

5. Taxpayer Rights & Safeguards

• Personal Hearing: Mandatory if requested, conducted via video conferencing.
• Natural Justice: AO must consider responses and provide reasoned orders.
• Rectification: Errors in orders can be corrected under Section 154.

6. Penalties for Non-Compliance

• Section 271(1)(b): ₹10,000 per default for ignoring notices.
• Section 270A: 50–200% penalty for underreported income