In the union budget 2020 finance minister extended faceless assessment proceedings to the CIT appeals also. Hence this also led to amendments in section 250 of the income tax act 1961 to enable notification of faceless appeal scheme. In this article we have discussed new era of faceless appeal scheme.
Faceless appeal scheme
Central Board of Direct Taxes under section 250 has notified faceless appeal scheme(6B) vide Notification No. 76/2020 dated 25 September 2020. Following board has been set up with this notification:
- Appeal Units
- Regional faceless appeal centre
- National faceless appeal centre
In short it is apparent from scheme that right from review of order and rectification of order, allocation of appeal, admission of additional evidence ,communication of notice/ questionnaire, verification/ enquiry of details, final communication of the appellate order,admission of additional ground thus everything shall be online and dispending the need of any physical communication between appellant and department.
Below are important points of the scheme.
- Coverage of the scheme
- Scheme covers that appeals under this scheme shall be disposed only in cases of specified class of income or specified class of persons or for specified territorial regions as specified by the board.
- It is provided that all Income Tax appeals except appeals relating to major tax evasion, International tax, sensitive and search matters, serious fraud and black money act shall be dealt in faceless manner in the press release issued by the Central Board of Direct Taxes.
- Hence, above matters can be detailed by Central Board of Direct Taxes by issuing notifications from time to time in this regard.
- Review of draft orders to be passed by the appeal units
- Where aggregate amount of penalty, tax, interest or fee payable in respect of disputed issues in appeal, is more than a specified amount by the Principal Chief Commissioner, in charge of the national faceless appeal centre, with the prior approval of Board. Draft order, shall be passed by the appeal unit the national faceless appeal centre shall send the draft order to an Appeal unit, other than the Appeal unit which prepared such order (i.e. Appeal unit- 2), for conducting review of such order which would be selected through an automated allocation system.
- As risk management strategy specified by the Central Board of Direct Taxes on case-to-case bases national faceless appeal centre shall decide whether to finalize the appeal order or to send to other appeal unit.
- National faceless appeal centre shall allot appeal to another appeal unit (i.e Appeal unit-3 other than appeal unit which prepared or reviewed appeal order) in case where any variation in the draft appeal order is suggested by appeal unit which reviewed draft appeal order.
- The appeal unit-3 shall either prepare revised draft appeal order as per the scheme or issue show cause notice by considering variation of intending to enhance an assessment or reducing refund.
- In short in cases as specified three appeal units can be involved for balanced appellate order.
- Hearing in personal
- Scheme also provides that person shall not be required to appear in personally either through authorized representative or in personal before the income tax in respect of any income tax proceedings.
- However, appellant can request for personal hearing and applicable regional faceless appeal centre can approve request of personal hearing if particular circumstance is covered in the circumstances covered in the scheme.
- Principal Chief Commissioner in charge of the national faceless appeal centre with prior approval of Central Board of Direct Taxes specify the circumstances in which personal hearing shall be permissible.
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