Faceless Assessment procedure in steps - Income Tax - Ready Reckoner - Income Tax

Faceless Assessment procedure in steps Step I: NFAC to allocate assignment to the AU NFAC shall allocate and assign the selected cases through automated allocation system to specific Assessing Unit for the purpose of Faceless Assessment and intimate the Assessee via SMS or email alert that the Assessee has been selected for the Assessment in accordance with the procedure laid down u/s 144B . Following can be the cases for assessing taxpayer s case under Faceless Assessment Scheme: - If the taxpayer furnishes an Income Tax Return voluntarily u/s 139 and the Assessment Unit picks up the case due to Annual Information Return and Income Tax Return. If the taxpayer furnishes the Income Tax Return in response to notice u/s 142(1) , 148(1) , or 143(2) . In case the taxpayer fails to file the income tax return in response to notice u/s 142(1) . In case the taxpayer fails to file the income tax return in response to notice u/s 148(1) . Step II: Assessment Unit send notice to Assessee through NFAC The Assessee receives a notice for Faceless Assessment under Section 142(2)/142(1) on his registered login ID by NFAC. The Assessee may file his response to the aforementioned notice within the date specified in such notice issued by NFAC. The reply received by Assessee will be forwarded to AU, through NFAC. Step III: Assessment Unit may require further information from Assessee. AU may ask for additional information, documents, or evidence for Faceless Assessment, from the Assessee, through NFAC and NFAC shall serve appropriate notice on the Assessee for obtaining such Documents and evidence. Assessment Unit may prepare list of documents required and sent to NFAC, NFAC shall send questionnaire and list of documents and evidence to assessee through notice. Assessee reply to the notice with attached requirements to NFAC. NFAC shall forward such reply of assessee to AU. Step IV: Assessing Unit may request for enquiry to Verification Unit through NFAC. If AU requires further cross-verifications and examination of the book of accounts or needs to verify the recording statements and witnesses referred by the Assessee for Faceless Assessment, then AU makes a request through the NAFC for conducting inquiry or verification by VU. NFAC shall allocate and assign the VU through an automated allocation system. Step V: Assessing Unit may request for enquiry to Technical Unit through NFAC. If the AU requires technical assistance or verification for undergoing Faceless Assessment, then it makes a request to TU for, Determination of arm s length price. Valuation of property. Withdrawal of registration. Approval, exemption, or any other technical matter by referring to TU. The request shall be assigned by the NFAC to the TU through an automated allocation system. Step VI: Assessment Unit determines the Income or Loss. After receiving the relevant replies to the notices by the Assessee, the AU shall prepare in writing, an income or loss determination proposal, after taking into account all the relevant material available on record. Where no variation prejudicial to Assessee is proposed, AU may send the same to the NAFC for the next procedure of Faceless Assessment. If the variation is being proposed then notice is served to the Assessee, stating variations proposed to be made to the income of the Assessee and calling upon him to submit as to why the proposed variation should not be made through NFAC. Step VII: Assessment Unit issue show cause notice to Assessee through NFAC. If the Assessee fails to comply with the said notice seeking information served by NFAC, or the earlier notice under Section 143(2) or u/s 142(1) , NFAC shall intimate the same to the AU. The AU shall serve upon the Assessee through NFAC a Show Cause Notice under Section 144 , giving him the opportunity to explain the reason or extend justifications. The Assessee shall file his response to the Show Cause Notice under Section 144 within the time specified in such notice, to the NFAC, which shall forward the same to the AU for Faceless Assessment. Step VIII: Assessee shall file his Response The Assessee shall file his reply to the Show Cause Notice to the NFAC by the date and time specified, which shall forward the reply to the AU if the Assessee fails to respond within the specified time. The NFAC shall intimate the same to AU. After considering the response of the Assessee or the intimation of failure of the Assessee to file a response received from NFAC and all the relevant material available on the record, the AU shall prepare an Income or Loss determination proposal in writing and send it to the NFAC. Step IX: AU prepare Draft Order reviewed by RU Upon receipt of the income or loss determination proposal, with or without any variations proposed to the income of the Assessee, as the case may be, the NFAC may, on the basis of the guideline issued by the board, convey to the AU to prepare a Draft Order in accordance with such income or loss determination proposal which shall thereafter prepare a Draft Order or assign them income or loss determination proposal to RU through an automated allocation system which shall conduct a review of such order prepare a review report and send to NFAC. Step X: RU send review report to AU The NFAC shall forward the review report received from the RU to the AU which has proposed the income or loss determination proposal. AU may accept or reject all modifications proposed in such review report prepare a Draft Order accordingly and send it to NFAC the AU shall record the reason for rejecting the modification prosed by RU. Step XI: Completion of Assessment In the case of Assessee, the NFAC shall convey the completion of the Faceless Assessment in accordance with such Draft Order which shall thereafter pass the Final Assessment Order and initiate penalty proceedings if any, and send it to NFAC. The NFAC shall serve a Final Assessment Order, notice for initiating penalty proceedings if any, and Demand Notice, specifying the sum payable by or refund of any amount due to the Assessee on the basis of such assessment to the Assessee.