Taxpayers get the right to personal hearing via video

An assessee will now be permitted for personal hearing through video conferencing, if he demands under the Faceless Penalty Scheme. Central Board of Direct Taxes (CBDT) has dropped the discretionary right of the tax official in considering request for personal hearing by assessees.

The Board has amended the scheme, introduced last January. This was implemented as a corollary to Faceless Assessment Scheme and Faceless Appeal Scheme. Under the scheme, penalty proceedings are conducted in an ‘e-proceeding’ facility through the assessee’s registered account in the designated portal.

According to the amendment, “Where the request for personal hearing has been received, the income-tax authority of relevant unit shall allow such hearing, through National Faceless Penalty Centre. It shall be conducted exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board.”

Earlier, it was said the assessee can make a request for personal hearing and 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. Changes in the provision have been made after some court ruling which directed permitting personal hearing in the Faceless Assessment Scheme, as a right of the assessee and not as a discretion of the tax department.

The amendment also omits Regional Faceless Penalty Centre from the Faceless Penalty Scheme and provides that electronic record will be authenticated by National Faceless Penalty Centre by way of an electronic communication instead of by affixing the digital signature whereas the penalty unit or review unit or technical unit or verification unit is required to affix the digital signature. As per the amended scheme, the terms Penalty Units and Penalty Review Unit shall refer to an Assessing Officer having powers so assigned by the Board.

Ensuring transparency

Sandeep Sehgal, Partner-Tax, AKM Global, a tax and consulting firm, states, “The Faceless Penalty (Amendment) Scheme, 2022 has omitted the Regional Faceless Penalty Centres concept from the Faceless Penalty Scheme 2021 thereby, making the entire scheme more centralised. In case of a personal hearing requested by the assessee, the income-tax authority of relevant unit shall be required to grant a virtual hearing which shall be through National Faceless Penalty Centre only. This will ensure transparency and also provide suitable opportunity to the taxpayers to present their viewpoint.”

According to the original scheme, faceless penalty centres were set up, 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.

It may be recalled that Prime Minister Narnedra Modi had launched faceless assessment scheme for all assessees on August 13 2020, while the faceless appeal scheme came into operation from September 25, 2020. 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.

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