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As a corollary to faceless assessment and faceless appeal scheme, the Income Tax Department has come out with faceless penalty scheme — where penalty proceedings will be conducted in an ‘e-proceeding’ facility through the assessee’s registered account in the designated portal.
The Central Board of Direct Taxes (CBDT) has notified that it will set up faceless penalty centres, both at the national and regional levels. While the National Faceless Penalty Centre will do the work in a centralised manner, the regional ones will facilitate the conduct of faceless proceedings and will be vested with the jurisdiction to impose penalty.
There will be units to facilitate the conduct of faceless penalty proceedings, to perform the function of drafting penalty orders, which include identification of points or issues for imposition of penalty, seek information or clarification on points or issues so identified, provide opportunity of being heard to the assessee or any other person and analyse the material furnished by the assessee or any other person.
Review procedures
There will be units to review procedures and check arithmetical correctness of penalty computation. Post-faceless assessment and based on the reference made, the National Faceless Penalty Centre will serve the showcause notice. Based on the response received, the units will propose imposing or dropping the penalty.
The national centre will examine the proposal based on risk management strategy, including by way of an automated examination tool and then pass the order. It can also refer the matter to a review unit. After all these procedures, the final order will be issued.
The notification has made it clear that no personal appearance is required. However, the assessee can make a request for personal hearing. The Chief Commissioner or the Director General, in charge of the regional faceless penalty centre, may approve the request for personal hearing through video conferencing.
Jurisdiction free
It may be recalled that Prime Minister Narnedra Modi had launched faceless assessment scheme for all assessees on August 13, while the faceless appeal scheme came into operation from September 25. Faceless assessment is a jurisdiction-free assessment where the taxpayer will not know who is assessing his tax returns. Faceless appeal refers to a mechanism where an appeal against an action of the Tax Department can be filed online and can be disposed of online.
Also read:Faceless schemes of direct taxes creating more problems than resolutions
Though there have been grievances against Faceless Schemes – Assessment and Appeal, the Finance Ministry claims that both are doing well. In a recent interview, Finance Secretary Ajay Bhushan Pandey had said in Faceless Assessment Scheme, out of the 58,320 cases assigned in September (when it was launched for select category of assessees), till now, 22,606 have been finalised. Of the 80,166 cases assigned to the scheme in November, 634 cases have been finalised. In the Faceless Appeal Scheme, the system is in place and cases have been allotted; notices are being issued and a few orders, too, have been passed, he said.