A. Background

On 13.8.2020, the Hon’ble PM Sh. Narendra Modi has launched a new platform for Transparent Taxation for ‘Honouring the Honest Taxpayers’, coining three new terms viz.

• Seamless
• Painless
• Faceless

This move showcases the perceived changed nature of the tax administration in India. The thrust of this taxation platform is on Faceless Assessments, Faceless Appeals, and Taxpayers’ Charter.

Earlier, the ‘e-Assessment Scheme, 2019’ had been notified by the Ministry of Finance vide Notification No. S.O. 3264(E) dated 12.9.2019. In the first phase, the Income-tax department had selected 58,319 cases of regular assessments u/s 143(3), for AY 2018-19, for scrutiny under the ‘e-Assessment Scheme, 2019’, on a pilot basis. The remaining regular assessment cases for AY 2018-19, were being conducted in the traditional manner by the jurisdictional assessing authorities via e-Proceedings functionality, in the e-filing portal of the Income-tax department.

B. Faceless Assessment Scheme 2019

However, our Hon’ble PM Sh. Narendra Modi has extended the coverage of the ‘e-Assessment Scheme 2019’ to all the regular assessments u/s 143(3), best judgment assessments u/s 144, and income escaping assessments u/s 147 of the Income-tax Act, 1961, as well, w.e.f. 13.8.2020.

CBDT vide Notification S.O. 2745(E) dated 13.8.2020, have amended the “e-Assessment Scheme 2019”, to provide that w.e.f. 13.8.2020, the “e-Assessment Scheme 2019”, shall he termed as “Faceless Assessment Scheme 2019”, and all Income-tax assessments (subject to certain exceptions)  shall be conducted in a faceless manner.

Further, CBDT vide Order F. No. 187/3/2020/ITA-I, dated 13-8-2020has directed, that all the assessment orders shall hereafter be passed by National e-Assessment Centre (NeAC), through the Faceless Assessment Scheme 2019.

However, two exceptions have been provided and these are:

i.  Assessment orders in cases assigned to Central Charges

(Block Assessment Cases u/s 153A/153C);

ii. Assessment Orders in cases assigned to International Tax Charges.

It has also been stipulated in the CBDT’s order, that any assessment order, which is not in conformity with the Faceless Assessment Scheme 2019, shall be treated as non-established and shall be deemed to have never been passed.

C. Manner of Conducting Faceless Assessment 2019

In the new ‘Faceless Assessment Scheme, 2019’ the conventional manual mode of conducting of regular assessments involving physical interface and verbal communication between the assessees and the assessing authorities has been completely done away with and all the communication/interface between the assessees and the assessing authorities shall be done electronically only via the ‘e-Proceedings’ utility in the registered ‘e-Filing’accounts of the assessees.

So, assessees and tax practitioners, need to be fully familiar and conversant with the following:

• Manner, mode and methodology of the conducting of ‘Faceless Assessments ’ involving therein
• Viewing and retrieving ‘e-scrutiny’ notices
• Requisitions in the registered ‘e-filing accounts’
• ‘e-Filing’ and uploading of qualitative and meritorious ‘e-responses ’ to such notices requisitions

It is no longer a matter of personal discretion and choice for the assessees and tax practitioners, but it has become a statutory necessity and a compulsion.

Faceless Assessment Appeals & Penalty Ready Reckoner with Real-Time Case Studies - Ready Reckoner for the New Faceless Taxation Regime, providing all aspects in a step-by-step manner with the help of real-time practical case studies, illustrative tables, infographics, FAQs

This book is a ready reckoner for the assessee and tax practitioners, to understand practicalities and nuances of the following, in an effective, qualitative and timely manner:

• Faceless Assessments under the newly inserted Section 144B of the Income Tax Act w.e.f. 01.04.2021
• Faceless Appeal Scheme, 2020 legislated w.e.f. 12.02.2021
• Faceless Penalty Scheme, 2021 incorporated w.e.f. 12.02.2021
• Legislative provisions concerning Faceless ITAT

The Present Publication authored by Mayank Mohanka, is the 4^th Edition & amended by the following:

• The Finance Act, 2021
• The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020
• All Important & Relevant CBDT’s Legislative Schemes, Circulars, Notifications & Press Releases on the Faceless Taxation Regime are updated till 31.03.2021

This book has the following noteworthy features:

• [Illustrative Tables, Infographics, Visuals & Real-time Scrutiny Windows] to explain the newly inserted Section 144B containing provisions for ‘Faceless Assessments’ and the Legislative Schemes of ‘Faceless Appeal Scheme, 2020’ and ‘Faceless Penalty Scheme, 2021’.
• [Real-time Practical Case Studies] on ‘Faceless Assessments’ on issues of:
  • Addition on account of HSBC Foreign Bank Account
  • Reassessment on account of Information from another IT Authority
  • Admission of Additional Evidence under Rule 46A
  • Cash Deposits out of Earlier Cash Withdrawals
  • Addition on account of considering Rental Business Income as Income from House Property
  • Appeal against Revisionary Order u/s 263
  • TDS on Transmission & Wheeling Charges
  • Appeal against Rectification Order u/s 154
  • Cash Deposits during Demonetization
  • Valuation of Shares u/s 56(2)(x)
  • Share Capital/Share Premium
  • LTCG on Penny Stocks
  • Disallowance u/s 14A/Rule 8D
  • Disallowance of Pre-commencement Business Expenditure
  • Taxability of Compensation received under RFCTLAAR Act, 2013
  • Revenue Recognition & Expenditure Booking in Real Estate Business
  • Bogus Purchases, Seized Diary, AIR/STR information
• [Specimens of Suggestive Qualitative & Meritorious] ‘e-Responses/Submissions’ on ‘Faceless Assessments & Faceless Appeals’
• Practicalities & Nuances of Differences between the Conventional Assessments, Appeals and Penalty Proceedings & the New Faceless Assessments, Appeals and Penalty Proceedings.
• [‘Step-by-Step-Manner’ through ‘Real-time’ ‘e-Proceedings’ windows] for demonstrating the actual conduct of ‘Faceless Assessments’, ‘Faceless Appeals’ & ‘Faceless Penalty’ proceedings
• [Practical Guide] to ‘e-Filing of Rectification Applications u/s 154’ & ‘e-Responses to Outstanding Income Tax Demands’.
• [Doctrine of Audi Alteram Partem] Critical Litigative Issues in the Faceless Taxation Regime
• Faceless ITAT: Some Key Issues
• FAQs on the ‘Faceless Taxation Regime’
• International Best Practices in Tax Administration & Indian Tax Administration

The detailed contents of this book are as follows:

• Faceless Assessments
  • Faceless Taxation Regime Enters Legislature
  • Personal Hearing via Video Conferencing in Faceless Assessments
  • Practical Guide to Faceless Assessments
  • Practical Case Study on ‘Faceless Assessment’ under section 143: Receipt of Share Capital/Share Premium
  • Practical Case Study on ‘Faceless Assessment’ under section 143: Long Term Capital Gain on Penny Stocks
  • Practical Case Study on Faceless Assessment under section 143 : Disallowance under section 14A read with rule 8D
  • Practical Case Study on ‘Faceless Assessment’ under section 143: Disallowance of pre-commencement business expenditure
  • Practical Case Study on Faceless Assessment under section 143 : Taxability of Compensation received under RFCTLARR Act, 2013
  • Practical Case Study on Faceless Assessment under section 143 : Revenue Recognition & Expenditure Booking in Real Estate Business
  • Practical Case Study on Faceless Assessment under section 147 : Bogus Purchase Entries
  • Practical Case Study on Faceless Assessment under section 147 : Seized Diary/Loose Sheets
  • Practical Case Study on Faceless Assessment under section 147 : Annual Information Return (AIR)
  • Practical Case Study on Faceless Assessment under section 147 : Information from Investigation Wing
  • Practical Case Study on Faceless Assessment under section 147 : Cash Deposits during Demonetisation
  • Practical Case Study on Faceless Assessment under section 147 : Valuation of Shares u/s 56(2)
  • Practical Guide to e-Filing of rectification application u/s 154 & e-response to outstanding Income-tax demand
  • Decoding Lesser Known Nuances of ‘Faceless Assessment Scheme, 2019’
  • Faceless Assessments : Few Critical Suggestions to Make them Flawless
  • International Best Practices & Indian Tax Administration
  • FAQs on Faceless Assessments
  • Key takeaways of SOPs issued by NeAC for Faceless Assessments
  • New Faceless regime as per ‘The Taxation Amendment Act, 2020’
• Faceless Appeals
  • Faceless Appeals: One more step towards Digital Tax Administration!!
  • Practical Guide to Faceless Appeals
  • Key Takeaways from Deliberations of Sr. Income Tax Department Dignitaries on Faceless Assessments & Appeals
  • Practical Case Study on Faceless Appeals: Addition in respect of Foreign Bank Account
  • Practical Case Study on Faceless Appeals: Information from Another IT Authority
  • Practical Case Study on Faceless Appeals: Admission of Additional Evidence
  • Practical Case Study on Faceless Appeals: Cash Deposits During Demonetisation
  • Practical Case Study on Faceless Appeals: AO’s Treatment of Business Rental Income as Income from House Property
  • Practical Case Study on Faceless Appeals: Challenge to Revisionary Order u/s 263
  • Practical Case Study on Faceless Appeals: TDS on Transmission & Wheeling Charges
  • Practical Case Study on Faceless Appeals: Challenge to Rectification Order u/s 154
  • Decoding the New Rules of Penalty Shoot-out: Faceless Penalty Scheme 2021!!
  • Final Fact-Finding Appellate Authority ITAT Also Going Faceless w.e.f. 1.4.2021
  • Faceless Taxation Regime & Audi Alteram Partem