Applicability of faceless assessment scheme under Income Tax Act

The faceless assessment scheme under the Income Tax Act is applicable to certain types of income tax assessments conducted by the tax authorities. The scheme was introduced in 2020 to make the income tax assessment process more transparent, objective, and efficient.

The faceless assessment scheme under the Income Tax Act was introduced with the following objectives:

1. To make the assessment process more objective and transparent: The faceless assessment scheme aims to reduce the discretion of individual tax officers and make the assessment process more objective and transparent. It is expected to eliminate any chances of personal bias or subjectivity in the assessment process.

2. To ensure faster and efficient assessments: The faceless assessment scheme is expected to reduce the time taken for assessments and make the process more efficient. The use of technology in the assessment process is expected to speed up the process and reduce the compliance burden on taxpayers.

3. To promote fair and equitable assessments: The faceless assessment scheme aims to ensure that assessments are conducted in a fair and equitable manner. The use of a team of tax officials from different locations is expected to bring in more objectivity and reduce the chances of any local bias or influence.

4. To enhance taxpayer convenience and reduce compliance burden: The faceless assessment scheme aims to make the assessment process more convenient for taxpayers. Taxpayers can submit their response and documents online, reducing the need for physical visits to the tax office. This is expected to reduce the compliance burden on taxpayers, particularly for small and medium-sized businesses.

5. To improve compliance and tax revenue: The faceless assessment scheme is expected to improve compliance and increase tax revenue for the government. The use of technology and a more objective assessment process is expected to reduce the chances of tax evasion and improve compliance among taxpayers.

The faceless assessment scheme is applicable to the following types of assessments:

1. Regular assessments: This includes assessments conducted under Section 143(3) of the Income Tax Act, which is a routine assessment of income tax returns filed by taxpayers.

2. Best judgement assessments: This includes assessments conducted under Section 144 of the Income Tax Act, which is done when the taxpayer fails to file an income tax return or fails to comply with a notice issued by the tax authorities.

3. Reassessment: This includes assessments conducted under Section 147 of the Income Tax Act, which is done when the tax authorities have reason to believe that income has escaped assessment.

Under the faceless assessment scheme, the assessment process is conducted by a team of tax officials located in different locations, with no physical interaction between the taxpayer and the tax authorities. The taxpayer can submit their response and documents online, and the assessment order is also communicated to the taxpayer online.

The faceless assessment scheme aims to reduce the discretion of individual tax officers and make the assessment process more objective and uniform. It is expected to bring in more transparency and efficiency in the income tax assessment process, and reduce the burden of compliance for taxpayers. ASC Group provides comprehensive services related to faceless assessment scheme.