Shocking reality - NATIONAL FACELESS ASSESSMENT CENTRE (NFAC ) SEEMS NOT PREPARED AND EQUIPPED TO HANDLE PENALTY MATTERS or NFAC is also adopting easy going approach and harassing assessee.

[DEV KUMAR KOTHARI]

Shocking reality -

NATIONAL FACELESS ASSESSMENT CENTRE (NFAC ) SEEMS NOT PREPARED AND EQUIPPED TO HANDLE PENALTY MATTERS  or NFAC is also adopting easy going and harrassment approach .

Earlier articles on similar issues about e-proceedings and faceless proceeding:

There are some articles written by the author which are available on this website, these can be easily searched therefore links are not provided. This article is in addition to and earlier articles and this is concerned with penalty proceedings which is generally initiated with assessment and proceedings  takes place  later on and  many times kept in abeyance if assessee has filed appeal against assessment order and or order in first appeal or order in revision etc.

Faceless authorities working online:

Faceless authorities (like NFAC)  are working online and it is expected that they have access to all information which are available in the system of income tax department in soft form on websites including information and records available in my account of assessee. Now-a-days assessee has ease of doing work because lot of documents which were finalised and uploaded by assessee are available on the website in my account. Therefore webpages / section like my account is  a big source of authenticate and final documents which were filed by assessee. These are available easily, if the internet and website are working properly. Author cannot understand any reason for authorities in course of e-proceedings not having access to these documents and information, particularly so  when notices issued by NFAC are available in my account and has to be responded by assessee through my account.

 In fact authorities must have access to total information and documents in relation to any assessee whose matter is being handle. They must have information for the year under consideration and also for other years so that in case of need they can consider the same.

Penalty matters- NFAC must have access to documents:

In case of penalty matters NFAC must have access to all documents of assessee that is ROI, BSPL, TAR and other reports and submissions submitted by assessee during assessment proceedings.

NFAC must definitely have access to departmental documents like notices, orders, letters etc. issued during assessment proceedings by the original AO, if assessment was completed by original AO in physical or e-proceeding mode.

NFAC must also have access to appeal filed by assessee, orders of AO and appellate authorities in case of assessee so that NFAC can know precedence.

When these documents are available in my account, then why NFAC is asking such documents from assessee.

Surprisingly and shockingly NFAC is not having even basis documents:

If certain communication and notices or reminders issued by NFAC about penalty proceedings are to be  believed and  relied on  it seems that NFAC have no document with it and that’s why NFAC is asking assessee to furnish even copy of assessment order and penalty notice issued by original AO.

From a reminder notice issued by NFAC:

Herein below some contents of reminder notice issued by NFAC for penalty proceedings is reproduced with highlights added (Name, PAN, reference, DIN  etc. are omitted for secrecy of concerned assessee.

Quoted from reminder letter issued byNFAC

National Faceless Assessment Centre Delhi

Dated: 04/06/2021

Sir/ Madam/ M/s,  xxxx

 Subject: Reminder Letter . . *ITBA          * Sub: Penalty Proceedings u/s 270A of the Income Tax Act, 1961 in the case of  xxxxxxxxxxxx      LIMITED (PAN:      ) for the A.Y. 2017-18 –

 Reg. Please refer to the pending penalty proceedings and this office show-cause dated  xxxxxx  .  In this regard, you are requested to furnish the following explanation and supporting documents:-

 1. Kindly furnish a copy of the assessment order passed in your case for the A.Y. 2017-18 in which the aforesaid penalty proceedings were initiated.

2. Kindly state the status of appeal, if any, filed against the above order. In this regard kindly furnish a copy of Form 35/ Form 36 filed along with the grounds of appeal. If the appeal has been decided, kindly furnish a copy of the relevant order passed by the appellate authority.

 3. Kindly show cause with all necessary documentary evidence that you may wish to rely upon as to why penalty u/s 270A should not be imposed in your case.

 4. If you have filed any reply manually with the AO before the transfer of case under the Faceless Penalty Scheme, you are requested to again upload a copy of your reply for our convenience

 5. Please inform whether you have opted Direct Tax Vivad Se Vishwas Scheme, 2020 (DTVsV Scheme, 2020) for the aforesaid assessment year. If yes, furnish the documentary evidence i.e. Form No. 5 issued by jurisdictional Pr. Commissioner of Income Tax.

 Your reply must be submitted on or before 11/06/2021, in the event of failure to produce the information and documents as called for within time, it will be held that you have no explanation to offer in this regard and the penalty proceedings shall be concluded accordingly.

Additional / Joint / Deputy / Assistant Commissioner of Income Tax Income-tax Officer, National Faceless Assessment Centre, Delhi

Un quote –

Observations of author:

From the above reminder it seems that NFAC has no information and documents  available to it to handle penalty proceedings. The NFAC is asking the assessee to furnish even very basic documents of the department.

Or it may be a case that NFAC is not making any attempt to find out records available on website and also physical documents which can be obtained from the AO and just adopting easy way to ask the assessee to provide every document.

In the list given in above reminder, except fresh explanation or other documents to be furnished by assessee against show cause notice, all other documents are available in my account. In my account not only for the year but also for other years documents are available and NFAC  must have access to the same for easy handling of the matter.

It must be that NFAC has to look into departmental records and should not  ask and reply on assessee to furnish even copy of  orders of authorities of tax department.

The notices also  says , you are requested to again upload a copy of your reply for our convenience

Author is unable to understand as to how a document already uploaded or  submitted will be more convenient if it is submitted again. Because a document earlier submitted is duly digitised and is easy to handle in comparison to document to be uploaded again.

Or that this shows that NFAC also want to burden the assessee to provide most of documents, though the same are available on website.

New portal:

Author hopes that on new portal being fully functional , NFAC must have ease of doing work. However, beginning of new portal has been very disappointing for the tax payers. The old website was understood by all and it was working well, changes in ITR for  each year were well taken care. There may be some  problems which could have been rectified, therefore,  it was not necessary to make a total new website by spending tax payers money and getting work done from outsider ITES companies.

Why taking services of private ITES:

One cannot understand as to why these work of websites  are given to outsider private  ITES companies when government have full-fledged national informatics centre which author believes is capable to develop and maintain websites for government departments.

Instead of awarding contracts to private parties,  NIC must be strengthened.

Discussions to this article

[DEV KUMAR KOTHARI]

In the given case notice was dated 04.06.21 (Friday) and date of compliance was on Friday 11.06.21. There were intervening two holidays. Therefore, time effectively allowed was very short. It seems that tax authorities think that the taxpayer has always be on high alert to meet the demands of tax authorities for submission of quite old documents and explanation.

Tax authorities perhaps forget that taxpayer need more time to earn more so that he can pay more tax.

Un-necessary penalty proceedings should not be kept pending and can be dropped to use more effectively time of tax authorities and taxpayers both. Provisions of petty penalties must be dropped.