Procedure for faceless assessment, reassessment or recomputation under section 273(1)

Procedure for faceless assessment, reassessment or recomputation under section 273(1).

176. (1) The assessment, reassessment or recomputation under section 270(10) or section 271 or section 279, as the case may be, in respect of cases as specified by the Board under section 273(2), shall be made in a faceless manner, in accordance with the procedure in this rule.

(2) The procedure for faceless assessment, reassessment or recomputation shall be the following: —

(a) the National Faceless Assessment Centre shall assign the case selected for faceless assessment under section 273 to a specific assessment unit through an automated allocation system;

(b) the National Faceless Assessment Centre shall intimate the assessee that the assessment in his case shall be completed in accordance with the procedure laid down under this rule;

(c) a notice under section 268(1) or section 270(8) shall be served on the assessee through the National Faceless Assessment Centre, requiring the assessee to furnish his response within the date specified therein to the National Faceless Assessment Centre, which shall forward such response to the assessment unit;

(d) where a case is assigned to the assessment unit under sub-rule (2)(a), it may make a request through the National Faceless Assessment Centre for—

(i) obtaining further information, documents or evidence from the assessee or any other person; or

(ii) conducting of enquiry or verification by a verification unit; or

(iii) seeking technical assistance by referring to the technical unit in respect of determination of arm's length price, valuation of property, withdrawal of registration, approval, exemption or any other technical matter;

(e) where a request under sub-rule (2)(d)(i) is made—

(i) the National Faceless Assessment Centre shall serve an appropriate notice or requisition on the assessee or any other person for obtaining the information, documents or evidence required by the assessment unit;

(ii) the assessee or any other person shall file his response within the time specified therein, or within such time as may be extended on an application made in this regard, to the National Faceless Assessment Centre; and

(iii) the National Faceless Assessment Centre shall forward such response to the assessment unit;

(f) where a request under sub-rule (2)(d)(ii) or (iii) is made, the National Faceless Assessment Centre shall, through an automated allocation system, assign the request to —

(i) a verification unit for conducting enquiry or verification; and

(ii) a technical unit for seeking technical assistance;

(g) the National Faceless Assessment Centre shall send the report received from the verification unit or technical unit, as the case may be, to the assessment unit from which the request was received as referred in sub-rule (2)(f);

(h) where the assessee fails to comply with the notice served under sub-rule (2)(e) or the notice issued under section 268(1) or section 270(8), the National Faceless Assessment Centre shall intimate such failure to the assessment unit;

(i) the assessment unit, through the National Faceless Assessment Centre, shall serve a notice under section 271 upon the assessee referred to in sub-rule (2)(h), providing an opportunity to show cause as to why the assessment should not be completed to the best of its judgment;

(j) the assessee shall furnish his response to the notice served under sub-rule (2)(i) within the time specified therein or within the extended time, if any, to the National Faceless Assessment Centre, which shall forward the same to the assessment unit;

(k) where the assessee fails to furnish his response to the notice served under sub-rule (2)(i) within the specified or extended time, the National Faceless Assessment Centre shall intimate such failure to the assessment unit;

(l) the assessment unit shall, after considering all relevant material available on record, prepare—

(i) an income or loss determination proposal where no variation prejudicial to the assessee is proposed and send a copy of the same to the National Faceless Assessment Centre; or

(ii) in any other case, a show cause notice stating the variations prejudicial to the interest of the assessee proposed to be made to the income of the assessee and calling upon him to submit as to why the proposed variation should not be made and serve such notice, on the assessee, through the National Faceless Assessment Centre;

(m) the assessee shall file his reply to the show cause notice referred in sub-rule (2)(l)(ii) within the time specified or such extended time, as the case may be, to the National Faceless Assessment Centre, which shall forward the same to the assessment unit;

(n) where the assessee fails to file a response within the specified or extended time, as the case may be, the National Faceless Assessment Centre shall intimate such failure to the assessment unit;

(o) the assessment unit shall, after considering the response received under sub-rule (2)(m) or after receipt of intimation under sub-rule (2)(n), as the case may be, and taking into account all relevant material available on record, prepare an income or loss determination proposal and send the same to the National Faceless Assessment Centre;

(p) upon receipt of the income or loss determination proposal referred to in sub-rule (2)(l)(i) or (2)(o), the National Faceless Assessment Centre may, on the basis of the guidelines issued by the Board, —

(i) convey to the assessment unit to prepare a draft order in accordance with such proposal; or

(ii) assign the proposal to a review unit to review such proposal through an automated allocation system;

(q) the review unit shall conduct review of the income or loss determination proposal assigned to it by the National Faceless Assessment Centre under sub-rule (2)(p)(ii) and prepare a review report, which shall be sent to the National Faceless Assessment Centre;

(r) the National Faceless Assessment Centre shall forward the review report referred in sub-rule (2)(q) to the assessment unit, which had proposed the income or loss determination proposal;

(s) the assessment unit shall, after considering such review report, accept or reject some or all of the modifications proposed therein, and after recording reasons in case of rejection of such modifications, prepare a draft order and send the same to the National Faceless Assessment Centre;

(t) the assessment unit shall send the draft order prepared under sub-rule (2)(p)(i) or sub-rule (2)(s) to the National Faceless Assessment Centre;

(u) in case of an eligible assessee, as mentioned in section 275(1), where any variation prejudicial to his interest is proposed, the National Faceless Assessment Centre shall serve the draft order upon the assessee;

(v) in any case other than that referred to in sub-rule (2)(u), the National Faceless Assessment Centre shall convey the assessment unit to pass a final assessment order in accordance with the draft order;

(w) the assessment unit shall pass the final assessment order and initiate penalty proceedings, if any, and send the same to the National Faceless Assessment Centre;

(x) upon receiving the final assessment order as per sub-rule (2)(w), the National Faceless Assessment Centre shall serve a copy of such order and notice for initiating penalty proceedings, if any, on the assessee, along with the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment;

(y) where a draft order is served as per sub-rule (2)(u), the assessee shall—

(i) file acceptance of the variations to the National Faceless Assessment Centre; or

(ii) file his objections to the variations before the Dispute Resolution Panel and the National Faceless Assessment Centre within the period specified in section 275(2);

(z) upon receipt of acceptance or upon no objection being filed within time specified in section 275(2) from the eligible assessee, the National Faceless Assessment Centre shall intimate the assessment unit to complete the assessment on the basis of draft order;

(aa) the assessment unit shall, upon receipt of intimation under sub-rule (2)(z), pass the assessment order in accordance with the draft order within the time period mentioned in section 275(4) and initiate penalty proceedings, if any, and send the order to the National Faceless Assessment Centre;

(ab) where objections are filed with the Dispute Resolution Panel under sub-rule (2)(y)(ii), the National Faceless Assessment Centre shall forward such intimation along with a copy of objection to the assessment unit;

(ac) the National Faceless Assessment Centre shall, in a case referred to in sub-rule (2)(ab), upon receipt of the directions issued by the Dispute Resolution Panel under section 275(5), forward such directions to the assessment unit;

(ad) the assessment unit shall, in conformity with the directions issued by the Dispute Resolution Panel under section 275(5), complete the assessment within the time allowed in section 275(13) and initiate penalty proceedings, if any, and send a copy of the assessment order to the National Faceless Assessment Centre;

(ae) the National Faceless Assessment Centre shall, upon receipt of the assessment order referred to in sub-rule (2)(aa) or (ad) as the case may be, serve a copy of such order and notice for initiating penalty proceedings, if any, on the assessee, along with the demand notice, specifying the sum payable by, or the amount of refund due to, the assessee on the basis of such assessment;

(af) after completion of assessment, the National Faceless Assessment Centre shall transfer all the electronic records to the Assessing Officer having jurisdiction over the assessee;

(ag) if, at any stage of proceedings before it, the assessment unit having regard to the nature and complexity of the accounts, volume of the accounts, doubts about the correctness of accounts, multiplicity of transactions in the ac-counts or specialised nature of business activity of the assessee, and the interests of the revenue, is of the opinion that it is necessary to do so, it may, upon recording its reasons in writing, refer the case to the National Faceless Assessment Centre stating that the provisions of section 268(5) may be invoked; and

(ah) the function of verification unit under this section may also be performed by a verification unit located in any other faceless centre set up under the provisions of this Act or under any scheme notified under the provisions of the Act, and the request for verification may also be assigned through the National Faceless Assessment Centre to such verification unit.

(3) For the purposes of faceless assessment, reassessment or recomputation—

(a) an electronic record shall be authenticated by—

(i) the National Faceless Assessment Centre by way of an electronic communication; or

(ii) the assessment unit or verification unit or technical unit or review unit, as the case may be, by affixing digital signature; or

(iii) the assessee or any other person, by affixing his digital signature or under electronic verification code, or by logging into his registered account in the designated portal;

(b) every notice or order or any other electronic communication shall be delivered to the addressee, being the assessee by—

(i) placing an authenticated copy thereof in the registered account of the assessee; or

(ii) sending an authenticated copy thereof to the registered e-mail address of the assessee or his authorised representative; or

(iii) uploading an authenticated copy on the Mobile App of the assessee, and followed by a real time alert;

(c) every notice or order or any other electronic communication shall be delivered to the addressee, being any other person by sending an authenticated copy to his registered e-mail address, followed by a real time alert;

(d) the assessee shall file his response to any electronic communication through his registered account, and the response shall be deemed authenticated once an acknowledgement is sent by the National Faceless Assessment Centre containing the hash result generated upon successful submission of response;

(e) the time and place of dispatch and receipt of electronic record shall be determined as per provisions of section 13 of the Information Technology Act, 2000 (21 of 2000);

(f) no personal appearance, either in person or through authorised representative, shall be required in connection with any proceedings before any unit set up under section 273;

(g) in a case where a variation is proposed in the income or loss determination proposal or the draft order, and an opportunity is provided to the assessee by serving a notice calling upon him to show cause as to why the assessment should not be completed as per such income or loss determination proposal, the assessee or his authorised representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the income-tax authority of the relevant unit;

(h) where the request for personal hearing has been received, the income-tax authority of relevant unit shall allow such hearing, through the National Faceless Assessment Centre, which 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;

(i) subject to section 273(8), any examination or recording of the statement of the assessee or any other person (other than the statement recorded in the course of survey under section 253) shall be conducted by an income-tax authority in the relevant unit, 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;

(j) the Board shall establish suitable facilities for video conferencing or video telephony including telecommunication application software which supports video conferencing or video telephony at such locations as may be necessary, so as to ensure that the assessee, or his authorised representative, or any other person is not denied the benefit of faceless as-sessment merely on the consideration that such assessee or his authorised representative, or any other person does not have access to video conferencing or video telephony at his end;

(k) the Principal Chief Commissioner or the Principal Director General, as the case may be, in-charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre and the units set up, in an automated and mechanised environment.

(4) For the purposes of section 273 and this rule, unless the context otherwise requires—

(a) "addressee" shall have the same meaning as assigned to it in clause (b) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

(b) "authorised representative" shall have the meaning assigned to it in section 515(3)(a);

(c) "automated allocation system" means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources;

(d) "computer resource" shall have the same meaning as assigned to it in clause (k) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

(e) "computer system" shall have the same meaning as assigned to it in clause (l) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

(f) "computer resource of assessee" shall include assessee's registered account in designated portal of the Income-tax Department, the Mobile App linked to the registered mobile number of the assessee, or the registered e-mail address of the assessee with his e-mail service provider;

(g) "digital signature" shall have the same meaning as assigned to it in clause (p) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

(h) "Dispute Resolution Panel" shall have the meaning assigned to it in section 275(17)(a);

(i) "electronic record" shall have the same meaning as assigned to it in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);

(j) "electronic verification code" means a code generated for the purpose of electronic verification as per the data structure and standards specified by the Principal Director General or Director General, as the case may be, in-charge of information technology;

(k) "eligible assessee" shall have the meaning assigned to in section 275(17)(b);

(l) "e-mail" or "electronic mail" and "electronic mail message" means a message or information created or transmitted or received on a computer, computer system, computer resource or communication device including attachments in text, image, audio, video and any other electronic record, which may be transmitted with the message;

(m) "hash function" and "hash result" shall have the same meaning respectively assigned to them in the Explanation to section 3(2) of the Information Technology Act, 2000 (21 of 2000);

(n) "Mobile app" means the application software of the Income-tax Department developed for mobile devices which is downloaded and installed on the registered mobile number of the assessee;

(o) "real time alert" means any communication sent to the assessee, by way of Short Messaging Service on his registered mobile number, or by way of update on his Mobile App, or by way of an email at his registered email address, so as to alert him regarding delivery of an electronic communication;

(p) "registered e-mail address" means the e-mail address at which an electronic communication may be delivered or transmitted to the addressee, including—

(i) the e-mail address available in the electronic filing account of the addressee registered in designated portal; or

(ii) the e-mail address available in the last income-tax return furnished by the addressee; or

(iii) the e-mail address available in the Permanent Account Number database relating to the addressee; or

(iv) in the case of addressee, being an individual who possesses the Aadhaar number, the e-mail address of the addressee available in the database of the Unique Identification Authority of India; or

(v) in the case of addressee being a company, the e-mail address of the company as available on the official web-site of the Ministry of Corporate Affairs; or

(vi) any e-mail address made available by the addressee to the income-tax authority or any person authorised by such authority;

(q) "registered mobile number" of the assessee means the mobile number of the assessee, or his authorised representative, appearing in the user profile of the electronic filing account registered by the assessee in the designated portal; and

(r) "video conferencing or video telephony" means the technological solutions for the reception and transmission of audio-video signals by users at different locations, for communication between people in real-time.