CBDT vide Notification No. 139/2021 dated 28.12.2021 in S.O. 5429(E) notified the new Faceless Appeal Scheme, 2021 to replace the Faceless Appeal Scheme, 2020 with effect from 28th December 2021.
Earlier, on 25th September 2020 on Deen Dayal Upadhyay's Birth Anniversary, the Board had notified Faceless Appeal Scheme, 2020 vide Notification No. 76/2020 which was later on amended on 31st March 2021 vide Notification No. 26/2021.
Now the Board has notified Faceless Appeal Scheme, 2021 afresh after superseding the Faceless Appeal Scheme, 2020. The new Faceless Appeal Scheme, 2021 will become effective from 28th December 2021.
The objective of introducing faceless appeal is to eliminate the physical interface between the taxpayers and the income tax authorities. This will help in curbing corruption and the arms twisting tactics by the department.
Appropriate amendments have been carried out in the Income Tax Act, 1961 to give powers to CIT(A) to decide the cases on a faceless manner by the Finance Bill, 2020.
In order to impart greater efficiency, transparency and accountability to the assessment process, a new faceless assessment scheme has already been introduced. It was proposed to amend the Income Tax Act so as to enable Faceless appeal on the lines of Faceless assessment. Accordingly, e-Appeals schemes will be notified for faceless proceedings in line with the faceless e-assessment scheme.
Following amendments have been made by the Finance Act, 2020 in section 250 of the Income Tax Act, 1961 which deals with the appeals before CIT (Appeals) to provide for the legal basis to the Faceless Assessment Scheme.
In section 250 of the Income-tax Act, after sub-section (6A), the following sub-sections shall be inserted, namely:—
“(6B) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of disposal of appeal by Commissioner (Appeals), so as to impart greater efficiency, transparency and accountability by—
(a) eliminating the interface between the Commissioner (Appeals) and the appellant in the course of appellate proceedings to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing an appellate system with dynamic jurisdiction in which appeal shall be disposed of by one or more Commissioner (Appeals).
(6C) The Central Government may, for the purposes of giving effect to the scheme made under sub-section (6B), by notification in the Official Gazette, direct that any of the provisions of this Act relating to jurisdiction and procedure for disposal of appeals by Commissioner (Appeals) shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:
Provided that no direction shall be issued after the 31st day of March, 2022.
(6D) Every notification issued under sub-section (6B) and sub-section (6C) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.”.
Provision for e-appeal or Faceless Appeal Scheme
In order to impart greater efficiency, transparency and accountability to the assessment process under the Act a new e-assessment scheme has already been introduced. With the advent of the e-assessment scheme, most of the functions/ processes under the Act, including of filing of return, processing of returns, issuance of refunds or demand notices and assessment, which used to require person-to-person contact between the taxpayer and the Income-tax Department, are now in the electronic mode. This is a result of efforts by the Department to harness the power of technology in reforming the system. All these processes are now not only faceless but also very taxpayer-friendly. Now a taxpayer can manage to comply with most of his obligations under the Act without any requirement for physical attendance in the offices of the Department.
The filing of appeals before Commissioner (Appeals) has already been enabled in an electronic mode. However, the first appeal process under the Commissioner (Appeals), which is one of the major functions/ processes that are not yet in full electronic mode. A taxpayer can file an appeal through his registered account on the e-filing portal. However, the process that follows after the filing of an appeal is neither electronic nor faceless. In order to ensure that the reforms initiated by the Department to eliminate human interface from the system reach the next level, it is imperative that an e-appeal scheme be launched on the lines of the e-assessment scheme.
Accordingly, sub-section (6B) in section 250 of the Act is inserted to provide for the following: —
i) Empowering Central Government to notify an e-appeal scheme for disposal of appeal so as to impart greater efficiency, transparency and accountability.
ii) Eliminating the interface between the Commissioner (Appeals) and the appellant in the course of appellate proceedings to the extent technologically feasible.
iii) Optimizing utilization of the resources through economies of scale and functional specialisation.
iv) Introducing an appellate system with dynamic jurisdiction in which appeal shall be disposed of by one or more Commissioner (Appeals).
v) It is also provided that in order to empower the Central Government, for the purpose of giving effect to the scheme made under the proposed sub-section, by notification in the Official Gazette, to direct that any of the provisions of this Act relating to jurisdiction and procedure of disposal of appeal shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification. Such directions are to be issued on or before 31st March 2022. It is provided that every notification issued shall be required to be laid before each House of Parliament.
On 13.08.2020, while launching the platform for “Transparent Taxation - Honouring the Honest” by Prime Minister Narendra Modi, he elaborated that this platform has major reforms like Faceless Assessment, Faceless Appeal and Taxpayers Charter.
Gist of All Notifications Issued so far for Faceless Appeal Scheme
Download CBDT Notification No. 139/2021 dated 28.12.2021 on Faceless Appeal Scheme, 2021 in pdf format
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