Articles

S.No.

Points of Distinction

Existing Faceless Regime in the Income Tax Act, 1961

New Faceless Regime as proposed in newly inserted legislative provisions in ‘the Bill’ concerning the faceless adjudication & tax administration

1.

Faceless Assessments

a.

Governing Legislation

Governed by Faceless Assessment Scheme, 2019 vide CBDT Notification No. S.O. 2745 dated 13.8.2020, u/s 143(3A) of the Income Tax Act.

Governed by a newly inserted section 144B in the Income Tax Act, 1961

b.

Date of Applicability

Starting w.e.f. 13.8.2020 & applicable till 31.3.2021.

Starting w.e.f. 1.4.2021 and applicable onwards.

c.

Coverage

(i) All Regular Assessments under section 143(3), for AY 2018-19.

(ii) All pending Income Escaping Assessments /Reassessments under section 147, as on 13.8.2020 but only where notice u/s 148/143(2)/142(1) has been issued by the AO or the Prescribed Authority on or before 31.3.2021.

(iii) Best Judgement Assessments u/s 144, uptill AY 2018-19.

(i) All Regular Assessments under section 143(3), and Best Judgement Assessments u/s 144, for AY 2019-20 and onwards. As the time barring completion period of regular assessments u/s 143(3) for AY 2018-19, is 31.3.2021, thus, these regular assessments for AY 2018-19, are covered by the Faceless Assessment Scheme, 2019, enunciated in CBDT Notification S.O. 2745 dated 13.8.2020.

(ii) All Income Escaping Assessments u/s 147, where the Notice u/s 148/143(2)/142(1) has been issued by the AO or the Prescribed Authority on or after 1.4.2021.

d.

Nomenclature of Nodal & Regional Centres

National e-Assessment Centre as the Nodal Centre and Regional e-Assessment Centres as the assessment conducting centres.

National Faceless Assessment Centre as the Nodal Centre and Regional Faceless Assessment Centres as the regional assessment conducting centres.

e.

Mentioning of Specific Issues for Selection of the Case for Assessment in Initial Notice u/s 143(2)

In the Faceless Assessment Scheme, 2019, it has been categorically prescribed that the National e-Assessment Centre shall serve the Notice u/s 143(2) on the assessee, specifying the issues for selection of his/her case for assessment.

In the newly inserted section 144B, the requirement of specifying the issues for selection of the case for assessment by the National Faceless Assessment Centre in the initial Notice u/s 143(2) has been done away with.

f.

Assessment Procedure in Cases referred by Assessees to Dispute Resolution Panel u/s 144C

No Specific Procedure for Faceless Assessment in Transfer Pricing Cases where Reference is made to DRP, has been prescribed.

Specific Procedure for Faceless Assessment in Transfer Pricing Cases where Reference is made to DRP has been prescribed u/s 144B, clauses (xxiii to xxxi), as under:

(i)Where the eligible assessee files his objection with the DRP, the National Faceless Assessment Centre shall upon receipt of the directions issued by DRP u/s 144C(5), forward such directions to the assessment unit in Regional Faceless Assessment Centre.

(ii) the assessment unit shall in conformity with the directions of DRP u/s 144C(5), prepare a draft assessment order u/s 144C(13), and send a copy of such draft assessment order to the national faceless assessment centre.

(iii) the national faceless assessment centre shall, upon receipt of the draft assessment order, send the draft assessment order to the assessee in the registered e-filing account, providing the assessee an opportunity, to file his/her objections to the same or finalise the assessment within the time limit prescribed u/s 144C(13), and serve a copy of such order to the assessee in his/her registered e-filing account, if the order is not prejudicial to the interest of the assessee.

2.

Determination of Arm’s Length Price by Transfer Pricing Officer (TPO) u/s 92CA in Transfer Pricing Cases.

Reference to TPO u/s 92CA is to be made to jurisdictional TPO only and determination of arm’s length price in Transfer Pricing Cases is to be done by jurisdictional TPO only.

Separately covered under newly inserted sub-sections (8), (9) & (10) of section 92CA, w.e.f. 1.11.2020, wherein a new Faceless Scheme may be notified by the Central Government, aimed at eliminating the interface between the transfer pricing officer and the assessee and introducing the team-based determination of arm’s length price, with dynamic jurisdiction.

3.

Rectification Function u/s 154, Issuance of Notice of Demand u/s 156

Rectification Powers are vested with Field Formations consisting of Jurisdictional AO under the Cadre Controlling Authority of PCCIT, outside the NeAC/ReAC Hierarchy.

Separately covered under a newly inserted Section 157A, w.e.f. 1.11.2020, wherein a new Faceless Scheme may be notified by the Central Government, aimed at eliminating the interface between the income tax authority and the assessee and introducing the team-based rectification of mistakes, amendment of orders, issuance of notice of demand or intimation of loss, with dynamic jurisdiction.

4.

Revisionary Powers u/s 263/264

Revisionary Powers are vested with Field Formations consisting of Jurisdictional CIT under the Cadre Controlling Authority of PCCIT, outside the NeAC/ReAC Hierarchy.

Separately covered under a newly inserted Section 264A, w.e.f. 1.11.2020, wherein a new Faceless Scheme may be notified by the Central Government, aimed at eliminating the interface between the income tax authority and the assessee and introducing the team-based revision of orders u/s 263 or 264, with dynamic jurisdiction.

5.

Collection & Recovery of Tax, Grant of Stay of Demand, Issuance of Certificate for Deduction of TDS at Lower/Nil Rate

Powers of Collection & Recovery of Tax & Grant of Stay of Demand, Issuance of Certificate for Deduction of TDS at Lower/Nil Rate are vested with Field Formations consisting of Jurisdictional AO/TDS AO, under the Cadre Controlling Authority of PCCIT, outside the NeAC/ReAC Hierarchy.

Separately covered under a newly inserted Section 231 w.e.f. 1.11.2020, wherein a new Faceless Scheme may be notified by the Central Government, aimed at eliminating the interface between the income tax authority and the assessee and introducing the team-based, collection and recovery of tax, grant of stay of demand and issuance of certificate for deduction of TDS at lower/nil rate, with dynamic jurisdiction.

6.

Valuation u/s 142A

Valuation Function is vested with the Technical Unit of the Regional e-Assessment Centre.

Separately covered under a newly inserted Section 142B w.e.f. 1.11.2020, wherein a new Faceless Scheme may be notified by the Central Government, aimed at eliminating the interface between the income tax authority and the assessee and introducing the team-based, inquiry or valuation, with dynamic jurisdiction.

7.

Collection of Information

The Power of Enquiry or calling for information u/s 133/133B/133C is vested with the Field Formations outside the NeAC/ReAC Hierarchy.

Separately covered under a newly inserted Section 135A w.e.f. 1.11.2020, wherein a new Faceless Scheme may be notified by the Central Government, aimed at eliminating the interface between the income tax authority and the assessee and introducing the team-based, inquiry or calling for information u/s 133/133B/133C, with dynamic jurisdiction.

8.

Assessment of Income Escaping Assessments u/s 147

Only those income escaping assessments u/s 147 are covered under the Faceless Assessment Scheme, 2019, where notice u/s 148(1)/143(2)/142(1) has already been issued by the jurisdictional AO on and before 1.4.2021, and which are pending for disposal as on 13.8.2020. However, the Power to Issue Notice u/s 148 is vested with jurisdictional AO, and the power to sanction the issuance of notice u/s 151, is vested with jurisdictional CIT only.

Separately covered under a newly inserted Section 151A w.e.f. 1.11.2020, wherein a new Faceless Scheme may be notified by the Central Government, aimed at eliminating the interface between the income tax authority and the assessee and introducing the team-based assessment, re-assessment, re-computation u/s 147 & issuance of notice u/s 148 & sanction of approval u/s 151, with dynamic jurisdiction.

9.

Effect of Orders

The effect of orders u/s 250, 254, 260, 262, 263 or 264, is to be given by the jurisdictional assessing officer only.

Separately covered under a newly inserted Section 264BA, wherein a new Faceless Scheme may be notified by the Central Government, aimed at eliminating the interface between the income tax authority and the assessee and introducing the team-based giving of effect of orders u/s 250, 254, 260, 262, 263 or 264, with dynamic jurisdiction.

10.

Approval or Registration

The Power of Granting Approval or Registration is vested with the jurisdictional assessing authorities only.

Separately covered under a newly inserted Section 264BA, wherein a new Faceless Scheme may be notified by the Central Government, aimed at eliminating the interface between the income tax authority and the assessee and introducing the team-based grant of approval or registration, with dynamic jurisdiction.

11.

Jurisdiction of Income Tax Authorities

Covered by the existing administrative framework involving physical interface.

Separately covered under a newly inserted Section 130, wherein a new Faceless Scheme may be notified by the Central Government, for the purposes of:

(i) exercise of all or any of the powers and performance of all or any of the functions conferred on, or, as the case may be, assigned to income-tax authorities by or under this Act as referred to in section 120; or

(ii) vesting the jurisdiction with the Assessing Officer as referred to in section 124; or;

(iii) exercise of power to transfer cases u/s 127;

(iv) exercise of jurisdiction in case of change of incumbency u/s 129, aimed at eliminating the interface between the income tax authority and the assessee and introduction of team-based exercise of powers and performance of functions by income tax authorities, with dynamic jurisdiction.