Faceless Assessment under section 144b of Income Tax Act

Introduction

Introduction to Faceless Assessment under Section 144B of Income Tax Act introduces a transformative approach to tax assessment, leveraging digital infrastructure and the National Faceless Assessment Centre (NFAC). The implementation of Section 144B of Income Tax Act streamlines the evaluation process, ensuring equitable treatment and greater efficiency in addressing taxpayer queries and concerns.

Table of Contents

Section 144B Explained

Implications of Section 144B Income Tax:

The Faceless Assessment Scheme was introduced to facilitate efficient and transparent tax assessments.
Minimization of the human interface between assessors and taxpayers.
Utilization of the NFAC for streamlined communication and assessment procedures.
Implementation of the digital infrastructure for smoother tax-related transactions.

Applicability of Section 144B Income Tax:

Scrutiny assessment under Section 143(3) and Best Judgment Assessment under Section 144 fall under the purview of Section 144B of the Income Tax Act.
Incorporation of a faceless approach in the assessment of income escaping cases under Section 147.
Extension of the Faceless Assessment Scheme to various provisions of the nfac Income Tax Act, including Section 253 and Section 279.

What is a Faceless Assessment Scheme?

Incorporating Section 144B of the Income Tax Act, the faceless assessment scheme revolutionizes tax evaluations. It seeks to improve transparency in income tax procedures and expedite the assessment process through the creation of the National Faceless Assessment Centre (NFAC) and its cutting-edge technological platform.

Workings of Section 144B of the Income Tax Act

Implementation of a technology-driven platform for seamless tax assessment procedures.
Elimination of physical interaction between taxpayers and the income tax department.
Incorporation of an electronic mode for the entire faceless assessment income tax process.
Introduction of the NFAC to facilitate centralized and efficient assessment operations.

Benefits of Section 144B of the Income Tax Act

It has enhanced transparency and accountability in the Faceless assessment process.
Reduction of direct contact between taxpayers and assessing officers for unbiased evaluations.
Simplification of the Faceless assessment scheme, saving time and resources for both taxpayers and authorities.
Integration of a secure and digitized system for effective tax filing and Faceless assessment management.

Structure for Faceless Assessment

The structure for faceless assessment under Section 144B of the Income Tax Act involves the National Faceless Assessment Centre (NFAC) and its regional units, including specialized assessment, verification, technical, and review units, ensuring an efficient evaluation process.
The structure for implementing Section 144B of the Income Tax Act includes the following components:

National e-Assessment Centre (NFAC): Central coordinating unit for electronic assessments.
Regional e-Assessment Centres: Establishments under the jurisdiction of regional Principal Chief Commissioners for conducting Faceless assessments.
Faceless Assessment Units: Responsible for identifying pertinent issues and analyzing relevant information for assessment determination.
Verification Units: Tasked with conducting inquiries, cross-verifications, and data examination.
Technical Units: Provide technical support and assistance on various aspects of assessment.
Review Units: Responsible for reviewing draft assessment orders and suggesting necessary modifications.

NFAC and Personal Hearing

The National Faceless Assessment Centre (NFAC) plays a pivotal role in overseeing the electronic Faceless assessment process. Additionally, it facilitates the following:

Facilitation of Virtual Personal Hearings: Allows for remote hearings and submissions through video conferencing, ensuring convenient access for the taxpayer.
Issuance of Notices and Orders: Communicates electronically authenticated notices and orders through various channels, including registered accounts, emails, and mobile applications.
Grievance Redressal: Provides mechanisms for addressing any grievances or disputes arising during the assessment process.

Section 144 Income Tax vs. Section 144B

Comparing Section 144 and Section 144B of the Income Tax Act highlights the transformative impact of the Faceless Assessment Scheme, transitioning from conventional to streamlined assessment methods. Section 144 involves the Assessing Officer’s best judgment assessment, while Section 144B leverages the Faceless Assessment Scheme, incorporating the National Faceless Assessment Centre (NFAC) and virtual hearings for enhanced efficiency and transparency.

Importance of Faceless Assessment Scheme

The Importance of the Faceless Assessment Scheme lies in its transformative impact on income tax evaluations, emphasizing transparency, efficiency, and equitable treatment for taxpayers. This innovative scheme is designed to streamline the assessment process while reducing the scope for undue influence, ensuring a fair and just taxation system.

Several key factors underscore the significance of the Faceless Assessment Scheme:

Enhanced transparency in income tax assessments
Minimization of undue influence and corruption
Streamlined and efficient tax filing processes for the taxpayer
Reduction of physical interface, promoting safety and convenience
Improved accountability and fairness in the assessment procedures

All of these factors point to the critical role that the Faceless Assessment Scheme has played in advancing a fairer and more effective tax system.

Procedure in Faceless Assessment

Taxpayer receives an intimation or notice regarding their assessment through the e-filing portal.
Case allocation to a specific assessment unit is done electronically without disclosing the assessing officer’s identity.
The assessment unit examines the taxpayer’s return and related documents.
Questions or additional information requirements, if any, are raised by the unit through the e-filing portal.
Taxpayer responds or provides necessary information through the portal.
No physical interaction between the taxpayer and the assessing officer is required.
Automated algorithms or artificial intelligence might be used to assist in the assessment process.
The final assessment order is passed by the designated team, again, without revealing individual officer details.
The order is electronically communicated to the taxpayer through the portal.

Conclusion

In conclusion, the implementation of Section 144B and the Faceless Assessment Scheme marks a significant stride toward modernizing the income tax assessment process. By enhancing transparency, efficiency, and taxpayer convenience, these reforms aim to foster greater compliance and trust in the tax system.
If you’re seeking clarity or assistance in navigating these reforms, ClearrMyNotice offers expert services to ensure a clear understanding of these changes and facilitate smooth compliance with the evolving tax regulations