Step-by-step guide to ‘Faceless Assessment Proceedings’ under Section 144B

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Indian government introduced the concept of faceless assessments, whereby scrutiny assessments are carried out in a faceless manner, that is, without any physical meeting or submission of physical documents. The National Faceless Assessment Centre (NFAC), along with other centres and units, have been established by the Central Board of Direct Taxes (CBDT).

Step 1: Visit the ‘e-filing portal’:

The assessee is required to visit the ‘e-filing portal’ from the link: https://www.incometax.gov.in/iec/foportal

Step 2: Log-in the account

Click on the ‘login’ button located on the top right side of the screen. On the next screen, fill in the ‘user id’, which is the ‘PAN’, and click ‘Continue’. Then enter the ‘password’ and click ‘continue’ to complete the login.

Step 3: Go to ‘e-Proceedings’ tab:

After login, go to ‘Pending Actions > e-Proceedings’. The assessee is redirected to a new page of ‘View e-Proceedings related to’, which displays all the ‘assessment notices’ under Section 143(1)(a)/143(2)/147/139(9)/270A, for different assessment years, which the assessee might have received.

Step 4: View the Assessment/Re-assessment Notices

To view the regular assessment proceeding details under Section 143(3), click ‘Assessment Proceedings under Section 143(3)/147 > ‘View Notices’.

Step 5: Select the Notice to Respond

In the sub-window of ‘Assessment Proceedings u/s 143(3)/147, the assessee can see all the notices, say under Section 143(2) or 142(1), issued for that particular assessment year.

This sub-window provides three tabs of (i) View Response; (ii) Notice/Letter Pdf, and (iii) Seek/View Adjournment.

In order to access the relevant notice, click ‘Notice/Letter Pdf’ tab. The assessee can seek adjournment by clicking “Seek Adjournment”, after providing the reason for seeking an adjournment.

Step 6: Download the Assessment Notice

To download the notice, go to ‘Pending Actions > e-Proceedings > View Notices > Detailed Notices’. Click on the ‘Download’ tab at the bottom of the page to download the assessment notice.

After downloading the assessment notice, the assessee can view the scrutiny notice sent by the AO containing the following details:

  • PAN of the Assessee

  • Address of the Assessee

  • Section under which Notice has been issued

  • Assessment Year

  • Notice No.

  • Date of issuing Notice

  • Purpose for sending the Notice

  • Questionnaire, if the notice is issued under Section 142(1).

Under the faceless regime under Section 144B, the notices under Section 143(2) of the Act are not issued by the jurisdictional Assessing Officer but by the National Faceless Assessment Centre (NaFAC).

Step 7: File ‘e-Response’ to Notice under Section 143(2)

For the purpose of filing/furnishing a ‘reply’ in response to a notice under Section 143(2), click on the tab ‘Submit Response’ tab,

Step 8: Tips for filing responses

(a) Partial responses: If the assessee is submitting a response on a piecemeal basis, he needs to choose ‘response type’ as ‘partial’.

(b) Full response: If the submissions have been made on a piecemeal basis, then there would be multiple ‘partial responses’. After submitting the ‘last partial response’, update the ‘Response type’ to ‘Full Response’. If the assessee wants to file just one response to the scrutiny notice, then opt for ‘Full Response’ in ‘response type’.

(c) Multiple Responses: The assessee can submit ‘multiple responses‘ to any single scrutiny notice.

(d) Brief remark to response: The assessee may also furnish a brief ‘remark’ to its response under the tab ‘Add Written Response/Remarks‘. The remark cannot exceed 4,000 characters.

(e) Uploading of supporting documents: The assessee may attach the supporting documents as ‘attachments’ to substantiate his response/submission by choosing different specified categories of attachments mentioned in the dropdown list. The assessee can attach scanned documents in .pdf, .xls, .xlsx, and .csv format. If the supporting document is not in the specified format, choose ‘Others’ from the dropdown list for attaching such documents. A maximum of 10 attachments/files can be uploaded, with each attachment not exceeding 5 MB. If the limit is exhausted, the assessee can opt for a ‘partial response’ to upload the remaining attachments.

(f) Name of attachments: Ensure that the names of the two attachments are not the same and should not exceed 100 characters. Only two special characters, hyphen ‘-‘ and underscore ‘_’, are permitted in the attachments’ name. If the name of the attachment is not as per the guidelines, it will result in an error in uploading the entire submission.

(g) ​Window closure: The facility to submit a response gets auto-closed seven days before the time-barring date of the regular assessment. If there is no time barring date, the AO can close the e-submission if the final order or decision is being prepared. Once the assessment proceeding is closed or completed in ITBA, there will be no e-submission allowed from the assessee.

Step 9: Calling of further information, documents or evidence from the assessee by way of issue of notice under Section 142(1) by the Assessment Unit through NaFAC

The Assessment Unit to which the case has been assigned by the NaFAC may make a request to the NaFAC to obtain such further information, documents or evidence from the assessee or any other person, as it may specify.

Where a request for obtaining further information, documents or evidence from the assessee or any other person has been made by the Assessment Unit, the NaFAC issues appropriate notice or requisition under Section 142(1) to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the Assessment Unit.

Step 10: View and retrieve scrutiny questionnaire under Section 142(1) and file ‘e-Response’

The initiation of the assessment proceedings by the issue of scrutiny notice under Section 143(2) is proceeded further by issuing a scrutiny questionnaire under Section 142(1) of the Act.

The assessee can access the notice under Section 142(1) by clicking the ‘Notice/Letter Pdf’ tab. The assessee can download the pdf file of such notice by clicking the ‘Download’ tab.

The assessee is required to file his ‘e-responses’ and attach the supporting records and documents in the same manner as in filing of his ‘e-response’ to notice under Section 143(2) as discussed above.

Step 11: View ‘e-Responses’

After submitting the ‘e-responses’, if the assessee wishes to view the responses filed, he can view them by clicking the link of ‘View Response’.

Step 12: Download ‘e-Responses/Submissions’ along with supporting attachments

The assessee may download all the filed submissions along with the corresponding attachments by clicking the links under the tab ‘Attachment’.

Step 13: Preparation of Income or Loss Determination Proposal by Assessment Unit

The assessment unit, after taking into account all the relevant material available on the record, and the replies furnished electronically by the assessee, prepare in writing an Income or Loss Determination Proposal, either accepting the returned income of the assessee or modifying the returned income of the assessee, as the case may be, and send a copy of such proposal to the NaFAC.

Step 14: Examination of the Income or Loss Determination Proposal by NaFAC & Issue of a Show Cause Notice to Assessee

The NaFAC examines the Income or Loss Determination Proposal in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to:

(a) finalise the assessment as per the draft order prepared on the basis of such Income or Loss Determination Proposal and serve a copy of such order and notice for initiating penalty proceedings, if any, to 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; or

(b) The NaFAC shall provide an opportunity to the assessee, in case a modification is proposed, by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the Income or Loss Determination Proposal/draft order; or

(c) Assign the Income or Loss Determination Proposal to a Review Unit, through an automated allocation system, for conducting review of such proposal.

Step 15: Filing of ‘e-Response’ by the assessee to the show-cause notice

The assessee is required to file his ‘e-response’ to such show-cause notice and upload the relevant supporting records and documents as attachments in the same manner as discussed above.

Step 16: Passing of the final assessment order by NaFAC

The NaFAC forwards the ‘e-Responses’ of the assessee to the show cause notice to the Assessment Unit, which in turn, after taking due cognisance of all the e-responses of the assessee, passes the revised draft assessment order. If the assessee so requires, the NaFAC shall provide the assessee with the opportunity of personal hearing via video telephony.

The assessment unit, after taking cognisance of the inputs from such personal hearing as provided to it by NaFAC, again passes the final assessment order, which is uploaded by NaFAC in the registered ‘e-Filing’ account of the assessee within the time barring limitation period of completion of assessments under Section 143(3) of the Act. The assessment order can be seen and downloaded by clicking the ” Download Closure Order” button in the main window by clicking on the icon “For Your Information”, under the ‘e-proceedings’ tab.

Step 17: Transferring all assessment records to Jurisdictional AO

The NaFAC transfers the final assessment order, and all the assessment records to the file of jurisdictional AO for imposing penalty, and recovery of outstanding income tax demand, if any.

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