9911796707
TMI BlogStandard Operating Procedure (SOP) for Assessment Unit (AU), Verification Unit (VU), Technical Unit (TU) and Review Unit (RU) under the Faceless Assessment provisions of Section 144B of the Income-tax ActX X X X Extracts X X X X X X X X Extracts X X X X ..... ict with the statute is noticed, then the provisions of Statute shall prevail. 4. These SOPs are strictly for departmental use only. 5. This is issued with the prior approval of the CBDT. Enclosed: As above. Yours faithfully, (Ashish Abrol) Commissioner of Income-tax-1, National Faceless Assessment Centre, Delhi Standard Operating Procedure (SOP) under the Faceless Assessment provisions of Section 144B of the Income-tax Act Index of contents S no Heading/Sub-heading Page no SOP -- Assessment Unit A Assignment of cases 1 B Preliminary Examination and Action 1 C Initial Questionnaire u/s 142(1) 2 D Process for issuance of notice u/s 142(1) 3 E Grant of adjournment to notice u/s 142(1) on request of assessee or suo-moto adjournment 4 F Analysis of Information submitted in response to questionnaire u/s 142(1) and Issue of Additional Questionnaire 4 G Non compliance of notice u/s 142(1) 4 H Assessment Procedure in case of non-compliance of notice u/s 142(1) & passing of best judgement assessment u/s 144 of the Act 5 I Enquiry/Verification by AU in Faceless mode only 6 J Reference to Verification Unit (VU) 6 K Reference to VU where assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. Assignment of cases Following class of cases, other than cases excluded u/s 1446(2), shall be assigned to AU: A.1 CASS category A.2 Compulsory Scrutiny Cases A.3 Set Aside Cases A.4 Reopened Cases B. Preliminary Examination and Action B.1 On initial assignment of case, AU must verify whether the case has been correctly assigned for Faceless assessment, and refer to NaFAC if not correctly assigned. B.2 Refer the case for transfer, if it falls under the exclusions under Section 1446(2), B.2.1 Within 5 days of assignment, or B.2.2 Within 5 days of receipt of information on the basis of which the case is identified as covered under exclusion under Section 1446 (2). B.3 In reopened cases: B.3.1 Where no return of Income is filed within the time specified in the notice under Section 148, issue notice under Section 142(1) wherever the same has not been issued. B.3.2 Where return of Income is filed, issue notice u/s 143(2) wherever the same has not been issued. C. Initial Questionnaire u/s 142(1) C.1 Initial questionnaire u/s 142(1) shall be, preferably, issued by AU within 15 days of assignment of cases. C.2 Before issuing the initial Questionnaire, AU shall: C.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D.3 Where there is no response to the initial notice under Section 142(1) within the compliance date: D.3.1 AU shall issue a communication (as per prescribed proforma -- Annexure AU-1), on all registered email IDs of the assessee available on ITBA/ Insight, with a request to comply within 5 days. D.3.2 The communication will only refer to non-compliance, without giving specific details of the case, so as to ensure that confidentiality of the queries, raised in the questionnaire accompanying the notice under section 142(1), is maintained, and the assessee responds through the e-filing portal only. E. Grant of adjournment to notice u/s 142(1) on request of assessee or suo-motu adjournment E.1 Where adjournment is granted, AU to ensure that adequate time is given to the assessee to respond: E.1.1 Adjournment up to 7 days where assessee seeks adjournment using the online option; E.1.2 Suo motu adjournment up to 7 days may be granted by the AU, if required. F. Analysis of Information submitted in response to questionnaire u/s 142(1) and Issue of Additional Questionnaire F.1 Examine reply of the assessee with reference to the issue involved in the case; and F.2 Cross-verify rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of Best Judgement assessment under Section 144 of the Act in a fair & reasonable manner H.1 Where variation prejudicial to the assessee is proposed in non-responsive cases, a Show Cause Notice for passing order under Section 144, containing such variations, shall be issued. H.2 In cases referred to VU, such SCN shall be issued ordinarily after receipt of Verification Report. H.3 If assessee complies with the requirements of the notice at any stage/SCN, AU shall proceed to make assessment under Section 143(3) as per procedure prescribed under Section 144B and not under Section 144. H.4 If assessee does not comply with the requirements of the notice/SCN, AU shall proceed to make assessment under Section 144 as per procedure prescribed under Section 144B. H.5 To ensure that the best judgment assessment in Non-Responsive case is demonstrably reasonable, the AU shall ensure that all the details referred in Para G.3.3 above are included in the final order. H.6 Order under Section 144 read with Section 144B is to be passed by AU, based on material available on record, with estimation of income in accordance with law. I. Enquiry/Verification by AU in Faceless mode only Function ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with details mentioned in Para K.1; K.4 The Cross Examination of the Witness by assessee on the scheduled date and time shall be conducted in the presence of the VU and the AU through VC; K.5 AU/VU may re-examine the Witness after conclusion of cross-examination; K.6 Where VU reports that reasonable adjournment is sought by the Witness for an alternative date and time, AU may reschedule VC and make a fresh reference to VU, following the procedure as per this Para; K.7 Where VU reports that the Witness is available at some other address not in physical proximity to that VU, AU may reschedule VC and make a fresh reference to the VU based on new address Pin code, following the procedure as per this Para. L. Reference to Technical Unit (TU) L.1 AU may seek assistance of TU on matters provided in Section 144B(1)(iv)(c) and Section 144B(3)(iv). L.2 Reference shall be made in prescribed formats (Annexure AU-3,4,5,6). L.3 Prior to seeking Legal Assistance, AU must: L.3.1 Refer to the guidance note on ITBA homepage; L.3.2 Take care that Legal issues already covered by decision of jurisdictional High Court or Supreme Court are not referred to TU; L.3.3 Obtain approval of PCIT of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompliance of the assessee; N.1.2.4 Summary of all submissions of the assessee, to demonstrably reflect application of mind and consideration of all submissions; N.1.2.5 Specific Information/material proposed to be used against the assessee; N.1.2.6 Variations proposed on the basis of reasonable inferences drawn. N.1.3 To ensure adherence to the principles of natural justice and reasonable opportunity to the assessee, timelines to be given for obtaining response to the SCN shall be: N.1.3.1 Response time of 7 days from the issue of SCN. N.1.3.2 Response time of 7 days may be curtailed, keeping in view the limitation date for completing the assessment. N.2 Personal Hearing against SCN N.2.1 Wherever personal hearing is sought by the assessee through the button on the e-filing portal, AU shall accord personal hearing to the assessee through Video Conferencing (VC) facility. N.2.2 To ensure adherence to the principles of natural justice and reasonable opportunity to the assessee, VC must be given within 2-3 days of request by the assessee. N.3 Income & Loss Determination Proposal (ILDP) N.3.1 ILDP is to be prepared in all cases, containing all the essential ingredients of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceptance of the draft order from the assessee within the specified time under Section 144C(2), AU shall: N.6.2.1.1 Capture the response in ITBA; N.6.2.1.2 Initiate all relevant penalty proceedings on the ITBA, where applicable, and; N.6.2.1.3 Pass final order as per provisions of Section 144C, within 3 days of communication. N.6.2.2 Upon receipt of communication, about no objection having been received from the assessee within the specified time under Section 144C(2), AU shall: N.6.2.2.1 Capture the fact in ITBA; N.6.2.2.2 Initiate all relevant penalty proceedings on the ITBA, where applicable, and; N.6.2.2.3 Pass final order as per provisions of Section 144C within 3 days of communication. N.6.2.3 Upon receipt of communication, about filing of objection by the assessee (along with copy of objections filed before DRP) within the specified time u/s 144C(2), AU shall: N.6.2.3.1 Capture the response in ITBA within 3 days of receipt of communication; N.6.2.3.2 Upon receipt of Directions of DRP, initiate all relevant penalty proceedings on the ITBA, where applicable, and; N.6.2.3.4 Pass final assessment order in conformity to DRP directions within 3 days of communication of D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence to Sec 241A of the Act: S.1.1 Upon receipt of information through MIS / NaFAC, regarding the determination of refund becoming due u/s 143(1), AU shall examine the case records of the relevant PAN/AY. S.1.2 Where grant of refund is likely to adversely affect revenue: S.1.2.1 Record reasons in writing; S.1.2.2 Obtain approval of PCIT of the AU (to be given within 7 days); and S.1.2.3 Communicate the same to JAO, through issue letter functionality - 241A dropdown in ITBA. S.1.3 Where grant of refund is not likely to adversely affect revenue, communicate the same to JAO through issue letter functionality -241A dropdown in ITBA. S.1.4 The power to withhold refund till the date of assessment, vests with the Jurisdictional Assessing Officer. S.2 Process with reference to Sec 281B of the Act: S.2.1 Where AU is of the opinion that it is necessary for the purpose of protecting the interest of the Revenue, it shall: 5.2.1.1 Record reasons for provisional attachment in writing; S.2.1.2 Submit such proposal to PCIT of the AU; S.2.1.3 Obtain approval of PCIT of the AU (to be given within 7 days); S.2.1.4 Pass an order in writing; S.2.2 Communicate to JAO, through ITBA, to gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edure for Handling References received from AU D.1 On receipt of reference from AU, the VU shall: D.1.1 Examine the reference to ensure it is: D.1.1.1 Complete and contains requisite documents, D.1.1.2 Has approval of PCIT of the AU, in case of references falling under Para 13.2 and B.3; D.1.2 Seek clarification through inter unit communication functionality in case of any deficiency; D.1.3 Clarification must be sought within 2-3 days of receipt of reference; D.1.4 Carry out the verification requested; D.1.5 In case of physical verification or service of notice/ summons: D.1.5.1 Where any new address is found, VU shall conduct verification at the new address if it is in physical proximity of the VU, D.1.5.2 Where the new address is not in physical proximity of the VU, the VU may close the verification after reference to the proximate VU for physical verification; D.1.6 Prepare a Verification Report as per format, along with Case History Details of Verification proceedings and any other findings, generally within 2-3 days of completion/ closure of verification; D.1.7 Forward the Verification Report to the AU through Insight. E. Procedure for Cross-examination of Witness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2 Valuation of Property A.1.3 Withdrawal of Registration, Approval, Exemption A.1.4 Any other Technical Matter A.2 As per Section 144B (3)(iv)-providing technical assistance in: A.2.1 Legal Matters A.2.2 Accounting A.2.3 Forensic A.2.4 Information Technology A.2.5 Valuation A.2.6 Transfer Pricing A.2.7 Data Analytics A.2.8 Management A.2.9 Agreement entered into under Sec 90 or 90A A.2.10 Any other Technical Matter B. Seeking clarification from AU B.1 TU may seek clarification from AU as per prescribed format. (Annexure TU-1) B.2 Clarification if required, must be sought within 2-3 days of receipt of reference. C. Tools for facilitating Technical Assistance C.1 TU may view case records through status Monitor; C.2 TU shall take assistance of all resources available including Knowledge Management Portal, Insight, Public domain, CMIE, MCA, other databases; C.3 TU must monitor developments pertaining to Legal Issues assigned to them. D. Procedure for Handling and Forwarding References by TU D.1 References are to be forwarded to the designated authority/expert in the following matters: D.1.1 Transfer Pricing; D.1.2 Valuation of Property; D.1.3 Withdrawal of Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l transaction disclosed in form 3CEB by the assessee; F.1.2 International transaction(s) not disclosed by the assessee; F.1.3 Specified domestic transaction disclosed by the assessee; F.1.4 Specified domestic transaction not disclosed by the assessee; F.1.5 Where the case is selected on the basis of CbCR data. F.2 On receipt of reference from AU, for determination of ALP by TPO, TU must ensure: F.2.1 Reference is complete and contains the requisite documents; F.2.2 Reference has the approval of PCIT of the AU as per the prescribed format. (Annexure TU-2) F.3 Forwarding of reference to TPO shall be made as per Para D.3 within 2-3 days of receipt/ clarification. F.4 TP order under Section 92CA(3) shall be forwarded to the concerned AU within 2 days of receipt. G. Procedure for Rendering Technical assistance on References for Valuation of Property / Asset/ Investment etc. G.1 On receipt from AU, TU must ensure that Reference is complete and contains the requisite documents as per prescribed format. G.2 Reference to the Valuation Officer shall be made as per Para D.4 within 2-3 days of receipt/ clarification. G.3 Valuation Report shall be forwarded within 1-2 day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unting, Forensic, Information Technology, Data Analytics, Translation of documents: J.1 On receipt from AU, TU must ensure that Reference is complete and contains the requisite documents. J.2 Reference to the concerned resource person shall be made as per Para D.4 within 2-3 days of receipt/ clarification. J.3 Report from the resource person shall be forwarded within 1-2 days of receipt to the AU. J.6 TU must follow up with resource person to monitor timely submission of report. J.7 TU must maintain and update database/panel of resource persons. J.8 Payment to the resource persons, wherever applicable, shall be made by PCIT of the TU as per GFR. Government of India Ministry of Finance Central Board of Direct Taxes National Faceless Assessment Centre New Delhi Dated: 03.08.2022 Subject: Standard Operating Procedure (SOP) for Review Unit (RU) Under the Faceless Assessment provisions of Section 144B of the Income-tax Act The Principal Chief Commissioner of Income Tax, National Faceless Assessment Centre, with the prior approval of the Central Board of Direct Taxes, New Delhi, lays down the following SOP for Review Unit (RU) under the Faceless Assessment provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority - SOP Para L (VIII) 7. Format for Show Cause Notice to assessee - SOP N.1 (IX) 8. Format for ILDP - SOP N.3.4 (X) 9. Format for Final Assessment Order - SOP 0.1 (XII) Formats for Technical Unit 10. Format for Seeking clarification - SOP TU B.1 (XIV) 11. TP reference received after approval of PCIT of AU SOP TU F2.2 (XV) 12. Format for making reference involving information relating to agreement entered under section 90 or 90A -- SOP TU H.1.1 (XVI) Annexure AU-1 Format of Communication to be issued through "Issue letter functionality "to all available mails of assessee in case of non-compliance of Initial notice u/s142(1) -- SOP D.3.1 Dear Taxpayer, Kindly refer to the ongoing assessment proceedings in your case for AY XXX-XX 2. Records show that you have not complied with the statutory notice(s) issued in your case. 3. Records of proceedings including notices issued are available in your account at e-filing portal (incometax.gov.in) 4. This is to remind that you are required to furnish your reply to the notice within the due time through your account at e-filing portal (www.incometax.gov.in). You must submit your reply within 5 days of receipt of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjustment - SOP Para L To, The Technical Unit, PAN: Name of the assessee : Assessment Year: Date: Sub :Reference for assistance/advice on Transfer Pricing adjustment Madam/Sir, Kindly refer to the above subject. Your assistance/advice is being sought on determination of arms length price of the transaction(s) as per Sec 92CA of the Act. 2. Description: 1 Copy of TP Report (Form 3CEB) (To be attached, except where not available in some cases selected on basis of CbCR) 2 Whether any transaction with Associate Enterprise found not disclosed, if yes description thereof alongwith supporting documents (Description alongwith attachment of supporting documents) 3 Date of approval of PCIT of AU < To be automatically filled by ITBA workflow > 4 Remarks (Any other information) < Free > Yours faithfully, Assessment Unit, AU-4 Format for reference to Technical Unit through ITBA for assistance for Valuation- SOP Para L To, The Technical Unit, PAN: Name of the assessee : Assessment Year: Date: Sub : Reference for assistance for Valuation Madam/Sir, Kindly refer to the above subject. Your assistance is being sought for valuation as detailed hereunder: 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nopsis of all submissions of the assessee relating to the issue and indicating the dates of submission. 2.3 Summary of information/evidence collected which proposed to be used against it attach documents if required) 2.4 Variation proposed on the basis of inference drawn ( specify the basis of inference and quantify the variation proposed, if possible) (Compliance date should give adequate opportunity and Personal hearing through VC is mandatory, if asked in response to SCN) AU-8 Format for ILDP - SOP N.3.4 ILDP is to be prepared in all situations whether variation proposed or not. The format is however similar and is given in free text in Systems. The following format for ILDP may be used to the extent feasible. 1 Reasons for selection of the Case and Type of Case and background facts 2 Details of opportunities given: Type of notice/comm unication Date of notice/co mmunication Date of compliance given Response of the assessee received/not received Date of response if received Response type (Full/part/ adjournment) Remarks if any. 3 Cases where variation is not proposed: 3.1 Complete description of issues (issue wise) 3.2 Synopsis of all submissions of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases where variation is proposed 4.1 Update the table of opportunities given to include the details of SCN or additional SCN issued and further notices including personal hearing through VC given. 4.2 Use the text of SCN issued to reproduce:- * Complete description of issues involved (issue wise) * Synopsis of all submissions of the assessee relating to the issue and indicating the dates of submission * Summary of information/evidence collected which proposed to be used against it attach documents if required) * Variation proposed on the basis of inference drawn 4.3 Synopsis of the reply of the assessee to SCN and additional SCN(if any) 4.4 Summary of information evidence collected after SCN (if any). 4.5 Point-wise rebuttal of reply of the assessed including analysis of any case law relied upon. 4.6 Conclusion drawn 5. Final computation of taxable income : SI No Description Amount (in INR) 1 Income as per Return of Income filed 2 Income as computed u/s143(1)(a) 3 Variation in respect of issue of < > (if any) 4 Variation in respect of issue of < > (if any) 5 Total Income/Loss determined 6 Assessed under section XX of the Income-tax Act. Penalty procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n basis of CbCR) 2 Whether any transaction with Associate Enterprise found not disclosed, if yes description thereof alongwith supporting documents (Description alongwith attachment of supporting documents) 3 Date of approval of PCIT of AU < To be automatically filled by ITBA workflow > 4 Remarks (Any other information) < Free Text > Yours faithfully, Assessment Unit, Income Tax Department TU-3 Format for making reference involving information relating to agreement entered under section 90 or 90A - SOP TU H.1.1 APPENDIX: Form A: Request for Information under the Provisions of Tax treaties Part I of Form A Basic Information 1. Taxpayer under investigation/examination in India Name Full Address Current jurisdiction 2. Country/Jurisdiction to whom request is being made 3. Contract details of Assessing Officer/DDIT (Investigation)/ Transfer Pricing Officer Name Designation Address Email Telephone and Fax 4. Contact details of Range/Unit head Name Designation Address Email Telephone and Fax 5. Contact details of Pr. CIT/CIT/Pr. DIT/DIT concerned Name Designation Address Email Telephone and Fax 6. Name of the foreign taxpayer/holder of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and administrative practice and is further in conformity with the agreement on the basis of which it is made. (c) Such information would be obtainable under Indian laws and the normal course of administrative practice in similar circumstances. (d) We have pursued all means available in Our own territory to obtain the information, except those that would give rise to disproportionate difficulties. Signature of the Pr.ClT Of AU Name and Designation General Instructions for filing up Form A 1. Both Parts I and Parts Il of this Form should be filled up by the Pr.ClT/PrDlT/ClT/DlT concerned and sent to the Competent Authority, i.e., JS (FT&TR-I) and JS (FT&TR-II), as the case maybe. The request for information in this Form should not be routed through the office of pr.CClT/pr.DGlT/CClT/DGlT but a copy may be sent to that office for information. 1. Part I contains basic information about the taxpayer under investigation/examination in India and the officers making the request. This Part needs to be filled up for record purposes and is not sent to foreign authorities. 2. Part Il is modelled on the lines of the template formulated by the OECD and is essentially the same as Annex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of some new evidence becoming available, the reasons for the same should be clearly explained in the covering letter of the P.ClT/Pr.DlT/ClT/DlT concerned. 8. It would be responsibility of the Range/Unit Head that requests for information under the provisions of tax treaties are made in all appropriate cases including carrying out multi-level enquiry to take the investigation to their logical conclusion. They are also responsible for ensuring that clarifications and feedback and provided in a timely manner and this aspect should be monitored by the Pr.ClT/Pr.DlT/ClT/DlT concerned and appropriate action should be taken wherever required. Instructions for filing up Part I of Form A 1. The purpose of filling up Part I of Form A is to have basic records of the taxpayer under investigation in India and the contact details of the officers making the request in the office of the Competent Authority so that the information provided by the foreign authorities or their requests for clarifications are sent to the correct jurisdiction. 2. In Row 1, the name, full address, PAN and the current jurisdiction of the taxpayer under investigation in India should be mentioned. 3. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute of limitation, necessity of conducting investigation quickly on account of suspected fraud, court case etc. should be mentioned here. If in the request it is mentioned that information should be provided by a particular date, it should be added, in appropriate cases, that the information received after date will be useful in penalty or appellate proceedings. Row 7 Full details of the person under investigation or examination by the Indian tax authorities, including PAN, date of birth/date of incorporation, full address and other details as available in the records should be mentioned here. As explained in Para 2.2.2 of the Manual on Exchange Of Information, the tax treaties do not restrict administrative assistance to residents of either Contracting States and thus information about residents Of third countries can also be requested. However, relevance Of the information about residents Of third countries vis-a-vis the person under investigation in India must be clearly explained in the request. Row 8 Under the laws Of certain countries/jurisdictions, the taxpayer or the holder of the information has certain rights including a right to be informed or notified that a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he background information. Row 13 The information which is requested from the foreign Competent Authority should be listed point-wise preferably as questions. The information sought should be specific and should be described as clearly as possible. The language should be simple and easily understandable to foreign authorities who may not be aware of India's tax laws and procedures or the terminologies used. The questions should be framed in such a manner that they can be answered directly on the basis of documents and other information available and the details requested should be specific. The information requested should be foreseeably relevant to the administration or enforcement of the Indian tax laws and their relevance should be clearly explained in light of the background information provided. Information in the form of "fishing expedition" should not be requested. In some cases, it has been observed that a large number of Questions are asked in the request for EOI even though some of the questions do not appear to emanate from the issues under investigation and the relevant questions which should actually be asked are not specifically stated. Request for vol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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