Central Board of Direct Taxes notifies Faceless Penalty Scheme, 2021

The Central Board of Direct Taxes through its notification made on 12th January 2021 has circulated the Faceless Penalty Scheme, 2021. The fine under this Scheme shall be levied with regard to such territorial area, or individuals or class of individuals, or income or class of income or matters or class of matters, or fines or class of fines as might be stated by the Board.
The fine shall be imposed under this Scheme according to the following process, namely.

•    In the event any income-tax authority or the National Faceless Assessment Centre, in a case-initiated penalty proceeding and issued a show-cause notice for the imposition of a fine. 

•    The National Faceless Penalty Centre would in a matter, where the reference was received according to the above clause would assign such case towards a specific penalty unit in any of the Regional Faceless Penalty Centres through a method of an automated allocation system.

•    When a case is assigned towards an assessment unit, it might make a request towards the National e-Assessment Centre for gaining such further information, documents, or evidence from the individual taxpayer or any other individual, as it might specify as well as conducting some inquiry or conducting verification by verification unit and shall search for technical assistance from the technical unit.

On a request being made through the assessment unit for any documents or evidence, the National e-Assessment Centre would issue an appropriate notice or requisition towards the individual taxpayer or any other individual for obtaining the information, documents, or evidence requested by the assessment unit and the individual taxpayer could submit a response towards the notice within the time stated in the notice.

The ‘assessment unit’ would, after taking into consideration all the pertinent material collected as above, shall pass a draft assessment order either accepting the returned income of the individual taxpayer or adjusting the returned income of the individual taxpayer, as the matter may be, and send a copy of such order towards the National e-Assessment Centre
However, any plea against an assessment order or penalty order made through the National e-Assessment Centre under this scheme could be filed before the Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing Officer.

The Central Board of Direct Taxes also brought in modifications and exceptions under the Income Tax Act for giving effect towards the Faceless Penalty Scheme, 2021.
Major Highlights from the notification are:

In the event, any income-tax authority or the National Faceless Assessment Centre has a case-driven penalty proceeding and issued a show-cause notice for the imposition of a fine. The National Faceless Penalty Centre would in a matter, where the reference was received according to the above clause would assign such case towards a specific penalty unit in any of the Regional Faceless Penalty Centres through a method of an automated allocation system

•    The National Faceless Penalty Centre would upon receiving the draft notice serve the show-cause notice, upon the assessee or any other individual, as the case may be, stipulating the date and time for filing a response.

•    wherein the case assigned towards a penalty unit, penalty proceedings are already started, such unit would make a draft notice calling upon the assessee or any other individual, as the case may be, in order to show cause as to why penalty must not be imposed under the pertinent provisions of the Act and send such notice towards the National Faceless Penalty Centre.

•    The assessee or any other individual shall file a response towards the show-cause notice, within the date and time stated there, or such extended date, as well as time as may be permitted depending on an application, made relating to this, with the National Faceless Penalty Centre.

•    The penalty unit might make a request towards the National Faceless Penalty Centre for gaining further information, documents or evidence from any income-tax authority or the National Faceless Assessment Centre; or gaining further information, documents or evidence from the assessee or any other individual; or looking for technical assistance or directing verification.

•    Anindividualwould not be needed to appear either personally or through an authorized representative with regard to any proceedings under the stated Scheme before the income-tax authority at the National Faceless Penalty Centre or Regional Faceless Penalty Centre or penalty unit or penalty review unit system under the stated Scheme.

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eStartIndia Team