A Comprehensive Guide to Faceless Income Tax Assessment

It does not render that your case is closed if you filed your ITR by 31st July. Tax heads might choose specific tax returns for in-depth scrutiny after the return gets filed and urge that the person must provide the documents that prove the claims incurred in the ITR, regarded as an assessment. In the past, individuals had to personally visit tax offices and physically submit their assessments.

However, a new approach called “faceless assessments” has been introduced by the government. This involves conducting scrutiny assessments without any in-person meetings or physical document submissions. The Central Board of Direct Taxes (CBDT) has set up the National Faceless Assessment Centre (NFAC) and other similar units to facilitate this process. The goal of faceless income tax assessments is to remove direct interactions between taxpayers and the income tax department. This scheme outlines the electronic procedures for conducting such assessments

Method to Do An E-assessment

NFAC will provide a digitally signed notice before the individual on his or her registered email ID and in the registered account with the e-filing portal (www.eportal.incometax.gov.in), once the case gets opted for scrutiny. The assessment shall be finished as per the provisions of the faceless assessment informed by the NFAC to the individual.

On the e-filing portal (www. eportal.incometax.gov.in) the individual is able to view the notice. Post logging in the notice could be viewed at the e-proceedings option beneath the pending action under the for your action tab. Via the e-filing account, the reply to the notices is filed.

If for collecting the details the individuals required some more time then he might ask for the adjournment via the new e-filing portal beneath the assessment tab. 15 days is the maximum time period for which an adjournment could be sought.

When providing a reply, there is an option to indicate whether the submitted answer is a “Partial response” or a “Full response.” The reply to the notice can be entered within the designated area, with a word limit in place. Additionally, it’s possible to append a written reply along with relevant records as an attachment. It’s important to note that when uploading this document, it’s necessary to ensure that the file size remains under 50 MB.

Tax authorities will review the information provided on the backend. If they are not pleased with the response or require more details based on the documents submitted, they might send another notice through the individual’s portal and email address. The person can also ask for a virtual hearing through video conferencing, subject to the applicable guidelines if approved.

Stages After Submitting Your Response:

Once the NFAC receives the final response:

If the NFAC is content with the submission and documents, they will issue a final assessment order.

If the submission is unsatisfactory, leading to a proposed increase in income or reduction in loss, resulting in a demand, a draft assessment order will be issued.

In response to the draft assessment order, the individual has two options:

• They can either present their objections to the Dispute Resolution Panel (DRP) or wait for 30 days for the assessing officer to issue the final order. Afterward, they can file an appeal with the Commissioner of Income Tax (Appeals) within 30 days of receiving the final assessment order.
• The transition to a faceless assessment process has simplified the task of making representations for individuals, removing the need for personal appearances. This change is also a positive step taken by the government to enhance transparency and accountability.