faceless assessment & appeal - fitbar
TRANSCRIPT
CA. PRAMOD JAINB. COM (H), FCA, FCS, FCMA, LL.B, MIMA, DISA, IP
CA. PRAMOD JAINB. COM (H), FCA, FCS, FCMA, LL.B, MIMA, DISA, IP
FACELESS ASSESSMENT&
APPEALS
FACELESS ASSESSMENT&
APPEALS
Shared at
Webinar, Faridabad Income Tax Bar Association7th November 2020
Shared at
Webinar, Faridabad Income Tax Bar Association7th November 2020
CA. Pramod Jain
ASSESSMENT
2015 –Pilot basis in Delhi & Mumbai
2017 – E-assessment in other cities –option given
2018 – E-assessment announced to be mandatory in few cities
2019 – E-Assessment Scheme 2019
India 1st
Country in the world to have E / faceless assessment in Income Tax
CA. Pramod Jain
S. 143(3A) CG may make a scheme, by notification for
purposes of making assessment of total income or loss of assessee u/s 143(3) or s.144 so as to impart greater efficiency, transparency & accountability by: Eliminating interface between AO & assessee in the
course of proceedings to the extent technologically feasible;
Optimising utilisation of resources through economies of scale & functional specialisation;
Introducing team-based assessment with dynamic jurisdiction.
CA. Pramod Jain
S. 143(3B) The CG may, for the purpose of giving effect to
the scheme made U/S 143(3A), by notification, direct that any of the provisions of this Act relating to assessment of total income or loss shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:
Provided that - No direction shall be issued after the 31st March, 2022
CA. Pramod Jain
NOTIFICATIONSS. 143(3A) - Notification No 61 /2019
[S0.3264 (E)] dt. 12th September 2019
Amended vide Not. No. 60/2020 [S.0.2745 (E)] dated 13th August 2020
S. 143 (3B) – Notification No. 62/2019 [S.O.3265(E)] dt. 12th September 2019
Amended vide Not. No. 61/2020 [S.0.2746 (E)] dated 13th August 2020
CA. Pramod Jain
CIRCULAR Cir. No 27/2019 dt. 27.9.2019 - exceptions
wherein E assessment not mandatory where assessment framed during FY 2019-20 Assessments u/s 153A, 153C & 144
Set-aside assessments;
Assessments in non-PAN cases;
Cases where ITR filed in paper mode & assessee does not yet have an E-filing a/c;
At stations connected through VSAT or with limited capacity of bandwidth (list by Pr. DGIT (System));
In u/s 147 due to difficulties in migration of data from ITO to ITBA etc. or in other cases jurisdictional Pr. CIT/CIT, in extraordinary circumstances such as complexities of case or administrative difficulties can permit conventional mode
CA. Pramod Jain
CASES COVEREDFor AY 2018-19 total 58319 cases were
selected under the Faceless Assessment Scheme, 2019 in 8 cities: Ahmedabad,
Mumbai,
Pune,
Bengaluru,
Hyderabad,
Chennai,
Kolkata and
Delhi.
CA. Pramod Jain
AMENDMENT MADE ON 13.8.2020 Order u/s 119 dated 13.8.2020
All assessment orders shall be passed by NeACthrough Faceless Assessment Scheme, 2019, except:- In cases assigned to Central Charges.
In cases assigned to International Tax Charges
Any assessment order which is not in conformity of Order shall be treated as non-est & shall be deemed to have never been passed
CA. Pramod Jain
NATIONAL E ASSESSMENT CENTERTo Act as a Central Cell between Tax payer
and the Income tax Department
Located in Delhi and inaugurated on 7th October 2019
To be headed by Pr. Chief Commissioner of Income Tax
CA. Pramod Jain
REGIONAL E-ASSESSMENT CENTER• ReAC comprises of :
• Assessment Unit
• Review Unit
• Technical Unit and
• Verification Unit
• Each ReAC to be headed by PCIT
• 8 ReACs were initially set up at Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Pune, Bangalore and Hyderabad.
CA. Pramod Jain
ASSESSMENT UNIT• Identification of points or issues material
for the determination of any liability (including refund) under the Act,
• Seeking information or clarification on points or issues so identified,
• Analysis of the material furnished by the assessee or any other person, and such other functions as may be required for the purposes of making assessment
CA. Pramod Jain
VERIFICATION UNIT• Enquiry,
• Cross verification,
• Examination of books of accounts,
• Examination of witnesses and recording of statements,
• Such other functions as may be required for the purposes of verification
CA. Pramod Jain
TECHNICAL UNIT• Any assistance or advice on:
• Legal,
• Accounting,
• Forensic,
• Information Technology,
• Valuation,
• Audit (inserted w.e.f. 13.8.2020)
• Transfer pricing,
• Data analytics,
• Management
CA. Pramod Jain
REVIEW UNIT• Review of draft assessment order including
• Checking whether relevant and material evidence has been brought on record,
• Whether relevant points of fact and law have been duly incorporated in the draft order,
• Whether issues on which addition/disallowance should be made have been discussed in draft order,
• Whether applicable judicial decisions have been considered and dealt with in draft order,
• Checking for arithmetical correctness of modifications proposed
CA. Pramod Jain
CA. Pramod Jain
CASES COVERED AFTER AMENDMENTHas furnished his ROIu/s 139 or
u/s 142(1) or
148(1); AND
a notice u/s 143(2) is issued
Has not furnished his ROI in response to a notice issued u/s 142(1)
Has not furnished his ROI u/s 148(1) AND a notice u/s 142(1) has been issued AO
CA. Pramod Jain
CHANGES IN THE SCHEME W.e.f. 13th August 2020 Name of Scheme changed from E-assessment
Scheme to Faceless Assessment Scheme 2019. Assessment u/s 144 is also covered ‘Rules’ mean Income Tax Rules, 1962 Provides for seeking adjournment or extension of
time limit for filing his response by the assessee Penalty Orders also covered Power to lay down standards, procedures and
processes for effective functioning of the NeAC, ReAC and other units to be exercised with the approval of CBDT.
CA. Pramod Jain
CHANGES IN THE SCHEME For authentication of electronic records, apart
from DSC, ‘electronic verification code’ also allowed.
Procedure for faceless assessment more detailed now
NeAC to authenticate electronic records by DSC only.
Personal hearing through video conferencing shall be held in any unit under this scheme. The procedure for personal hearing through video conferencing has been extensively provided.
CA. Pramod Jain
THE INITIATION PROCESS CA. Pramod Jain
CA. Pramod Jain
Assessee
E-Filing Website
NeAC
ReAC
Assessment Unit
Verification Unit
Technical Unit
Review Unit
MODUS OPRENDI• Tax payers selected for Scrutiny to receive
notices over email on their registered email ids and in their accounts created on the Income tax e-filing portal www.incometaxindiaefiling.gov.in & SMS alerts on registered mobile number thru NeAC
• Response to notices within 15 days electronically or seek extension
• Any notice / communication to have DIN
CA. Pramod Jain
MODUS OPRENDI• On receipt of response from Tax payer, NeAC to
allocate the matter to Assessing Unit of any one ReAC via an Automated allocation system
• AU, may make a request to NeAC for:• obtaining further information, documents or
evidence from assessee or any other person
• conducting of certain enquiry or verification by verification unit;
• seeking technical assistance from technical unit;.
• All routing would be thru NeAC. No direct communications amongst Units of ReAC
CA. Pramod Jain
MODUS OPRENDI• Where assessee fails to comply with notices
including u/s 142(1) or 142(2A), NeAC may issue Show Cause Notice (SCN) to assess him u/s 144
• On failure to reply to such SCN, NeAC to intimate to Regional AU
• Draft assessment order to be sent by the Regional AU to NeAC.
• AU to also provide details of the penalty proceedings to be initiated therein, if any
CA. Pramod Jain
MODUS OPRENDI• NeAC to examine draft assessment order in
accordance with risk management strategy specified by CBDT, including by way of an automated examination tool, to:• finalise assessment as per draft assessment order &
serve a copy of such order, etc, to assessee; or
• provide opportunity to assessee, where modification is proposed, by serving SCN as to why assessment should not be completed as per draft order; or
• assign draft assessment order to a review unit in any one ReAC, through automated allocation system, to review the draft assessment order
CA. Pramod Jain
MODUS OPRENDI• On receiving the concurrence of Review Unit
NeAC to:• finalise assessment as per draft assessment order &
serve a copy of such order, etc, to assessee; or
• provide opportunity to assessee, where modification is proposed, by serving SCN as to why assessment should not be completed as per draft order
• NeAC upon receiving suggestions for modifications from review unit, assign case to an AU, other than the AU which has made the draft assessment order, through an automated allocation system
CA. Pramod Jain
MODUS OPRENDI• The new AU shall, after considering the
modifications suggested by the review unit, send the final draft assessment order to NeAC
• On receiving final draft asses. Order, NeAC to:• finalise assessment as per draft assessment order &
serve a copy of such order, etc, to assessee; or
• provide opportunity to assessee, where modification is proposed, by serving SCN as to why assessment should not be completed as per draft order
• Response submitted by tax payer on SCN shall be sent by NeAC to the AU. If no response received, NeAC would finalise order as per draft.
CA. Pramod Jain
MODUS OPRENDI• AU shall, after taking into account the response
furnished by assessee, make a revised draft assessment order and send it to NeAC
• NeAC upon receiving the revised draft assessment order:• in case no modification prejudicial to the interest of
the assessee is proposed with reference to the draft assessment order, finalise the assessment or
• in case a modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, provide an opportunity to the assessee, by serving a SCN
CA. Pramod Jain
MODUS OPRENDI• All communications to be in electronic mode
except when done by verification unit for statements or personal hearing
• Personal hearing with the tax payer and/or his representative may be allowed in where SCN issued for modification but exclusively through video conferencing and/or through video telephony in any unit of this scheme.
• Personal hearing to be approved by head of ReAC
CA. Pramod Jain
MODUS OPRENDI• NeAC shall, after completion of assessment /
penalty, transfer all electronic records of the case to the AO having jurisdiction over such case,
• Appeal against the assessment order passed by NeAC can be filed with the CIT (A) having jurisdiction over such jurisdictional AO
CA. Pramod Jain
HIERARCHYThe hierarchy in Faceless scheme will work
with 30 CCsIT, 154 PCsIT, 565 Addl/Joint CsIT, 645 DCsIT/ACsIT, 2830 ITOs and attendant staff.
The Board has diverted these posts vide order No.149 of 2020 dated 13.8.2020
As a result the residual jurisdiction will now rest with 32 CCsIT, 96 PCsIT, 252 Addl/Joint CsIT, 261 DCsIT/ACsIT, 1274 ITOs and attendant staff.
CA. Pramod Jain
CA. Pramod Jain
HIERARCHY - REACCA. Pramod Jain
AU1 PCIT
4 Addl./Jt.CsIT
4 DCs/ACsIT
20 ITOs
VU1 PCIT
4 Addl./Jt.CsIT
4 DCs/ACsIT
20 ITOs
RU1 PCIT
3 Addl./Jt.CsIT
6 DCs/ACsIT
9 ITOs
TU1 PCIT
3 Addl./Jt.CsIT
6 DCs/ACsIT
9 ITOs
VARIOUS NOTIFICATIONS / ORDERS1. SO 2745/46 – TPL – Amending E-Assessment Scheme
2019 notifications
2. SO 2755 – PCIT merger residual charges
3. SO 2754 – CCIT residual charges
4. SO 2756 –New Jurisdiction of NeAC
5. SO 2757 –New Jurisdiction of ReAC
6. SO 2758 – PCIT (VU) Notification – Prescribed Authority u/s 133C
7. Office Order – 1 – Setting up of NeAC
8. Officer Order – 2 – Setting up of ReAC
9. Order u/s 119 – Non est order outside faceless assessment.
CA. Pramod Jain
WRITTEN SUBMISSIONSTotal emphasis on written submissions
Improve writing skills
Use PAN, subject, year, DIN, Assesseename if by A/R
Respond within 15 days
Positive approach
Negate Specific question
State Factual position
Mention Legal position
CA. Pramod Jain
ISSUES - DEPARTMENT• Robust & secure data servers for storage of data
gathered at level of NeAC & ReACs
• Requisite Internet band width & secured communication channels for implementation
• Availability/Development of facilities to support video conferencing and/or video telephony
• Capability of handling bulk submission online and resolving real time technical glitches
• Development of systems for Automated allocation of cases to ReACs.
• Adequate training
CA. Pramod Jain
ISSUES - ASSESSEES• Necessity to keep address, email-id & mobile
number updated in the Income tax database
• Lot of time & cost may be consumed in digitizing physical data.
• Hardships faced on account of Technical glitches due to lack of appropriate IT infrastructure.
• Ability to differentiate between genuine communication received from department vis-a vis fake communication
• Basic understanding of operation of this scheme
CA. Pramod Jain
STILL MANUALS. 154
S. 263 / 264
Recoveries
Stay of Demand
Administration
Prosecution
Compounding
CA. Pramod Jain
PROS / CONSSaving of Time and Money of AR
Not to face mood swings of AOs
Assessment records available
Change of Satisfaction Mode !!
Whose Satisfaction now – NeAC or AU or Officer of AU !!!!
AO did not remain AO in many cases –Instructions based assessments !!!!
CA. Pramod Jain
CA. Pramod Jain
ITD Assessee
CA. Pramod Jain
APPEALS
S. 250(6B) CG may make a scheme, by notification for
purposes of disposal of appeal by CIT (A) to impart greater efficiency, transparency & accountability by: Eliminating interface between CIT(A) & appellant in
the course of appellate proceedings to the extent technologically feasible;
Optimising utilisation of resources through economies of scale & functional specialisation;
Introducing an appellate system with dynamic jurisdiction in which appeal shall be disposed of by one or more CIT(A).
CA. Pramod Jain
S. 250(6C) The CG may, for the purpose of giving effect to
the scheme made U/S 250(6B), by notification, direct that any of the provisions of this Act relating to jurisdiction and procedure for disposal of appeals by CIT(A) shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:
Provided that - No direction shall be issued after the 31st March, 2022
CA. Pramod Jain
NOTIFICATIONSS. 250(6B) - Notification No 76 /2020
[S0.3296 (E)] dt. 25th September 2020
S. 250 (6C) – Notification No 77 /2020 [S0.3297 (E)] dt. 25th September 2020
CA. Pramod Jain
FACELESS APPEAL CENTERSCA. Pramod Jain
•National Faceless Appeal Centre•To facilitate conduct of e-appeal
proceedings in Centralized manner
•Regional Faceless Appeal Centre•To facilitate conduct of e-appeal
proceedings
•Perform function of disposing appeal
APPEAL UNITS Admitting additional grounds of appeal
Making required inquiry
Directing NeAC or AO for making further inquiry,
Seeking information or clarification on admitted grounds of appeal,
Providing opportunity of being heard to appellant,
Analysis of material furnished by appellant,
Review of draft order
Other functions as may be required
CA. Pramod Jain
CA. Pramod Jain
Assessee
E-Filing Website
NFAC
RFAC
Appeal Unit Appeal Unit Appeal Unit
ADMISSION OF APPEAL• Appeal Unit to decide on condonation for
delay in filing u/s 249(2) – to admit or reject
• In case of no ITR filed and advance tax not paid as required u/s 249(4)(b) – Appeal Unit to decide on application for exemption from the same
CA. Pramod Jain
MODUS OPRENDI• AU may request NFAC to:
• Obtain such further information, document or evidence from appellant or any other person
• Obtain a report of NeAC/AO on grounds of appeal or information, document or evidence filed by appellant
• Direct NeAC or AO for making further inquiry u/s 250(4) &d submit a report thereof;
• NFAC shall serve notice upon appellant or any other person, or NeAC or AO, to submit such information, document or evidence or report, as may be specified by AU or as may be relevant to appellate proceedings, on specified date & time
CA. Pramod Jain
ADDITIONAL GROUNDS• Where response is filed by appellant or any
other person, or a report is furnished by NeAC or AO, the NFAC shall send such response or report to the AU, and where no such response or report is filed, inform the AU;
• Appellant may file additional ground of appeal in such form, as may be specified by NFAC, specifying therein the reason for omission of such ground in the appeal filed by him – may be admitted or rejected
CA. Pramod Jain
ADDITIONAL EVIDENCE• Appellant may file additional evidence,
specifying how his case is covered by circumstances specified in R. 46A(1)
• Procedure for additional evidence to be admitted / rejected to be followed
• NeAC or AO, may request NFAC to direct production of any document or evidence by appellant, or examination of any witness.
• NFAC to send such request to AU, who would examine and prepare notice, etc. to be sent by NFAC
CA. Pramod Jain
ENHANCEMENT OR PENALTY• AU shall prepare a show-cause notice containing
the reasons for such enhancement or reduction, as the case may be, and send such notice to the NFAC
• NFAC shall serve the notice, upon the appellant.
• Appellant shall, within date and time specified (extended) in notice, file his response to NFAC
• Where a response is filed by appellant, NFAC shall send such response to AU, or where no such response is filed, inform the AU.
CA. Pramod Jain
DRAFT ORDER• AU shall, after taking into account all relevant
material available on record, including response filed, if any, by appellant or any other person, or report furnished by NeAC or AO and after considering any matter arising out of proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised in appeal:• prepare in writing, a draft order in accordance with
S. 251; and
• send such order to NFAC along with penalty proceedings, if any, to be initiated therein
CA. Pramod Jain
DRAFT ORDER• If enhancement – refer to another AU
• In other cases examine the draft order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to:• finalise the appeal as per the draft order; or
• send the draft order to an AU, other than the unit which prepared such order, in any one RFAC through an automated allocation system, for conducting review of such order
CA. Pramod Jain
DRAFT ORDER• NFAC shall, upon receiving suggestion for
variation from the AU, assign the appeal to an AU, other than the AU which prepared or reviewed the draft order, in any one RFAC through an automated allocation system
• Unlike faceless assessment – appellant not to receive draft appeal order
CA. Pramod Jain
OTHER PROCEEDINGS• Penalty Proceedings
• Rectification Proceedings
• Personal hearing• Appellant or his AR may request for personal hearing
so as to make his oral submissions or present his case before AU
• Chief Commissioner or Director General, in charge of RFAC under which concerned AU is set up, may approve the request for personal hearing if it is covered by circumstances as is specified
• Such hearing shall be conducted exclusively through video conferencing or video telephony
CA. Pramod Jain
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CA. Pramod Jain
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