Last updated: December 2nd, 2024 7:41 PM

Faceless Appeal Scheme, 2020

On 13.08.2020, while launching the platform for “Transparent Taxation - Honouring the Honest”, Prime Minister Narendra Modi, announced that Faceless Appeal will be available across the country from 25.09.2020. In line with the announcements, The Central Board of Direct Taxes (CBDT) has notified the Faceless Appeal Scheme, 2020 vide a notification dated 25th September 2020. This e-appeal scheme will apply to all the pending appeals as well as new appeals files forthwith before the CIT(A). This scheme is released in Gazette as per the requirement of the Government of India and this article will provide details on the same.

Features of Faceless Appeal Scheme or e-Appeal Scheme

Under Faceless Appeals, the entire process of Income Tax appeals (e-allocation of appeal, e-communication of notice, e-verification to e-hearing, and e-communication of the appellate order) will be finalized in a faceless manner. There will be no physical interface between the taxpayers or the counsels and the Income Tax Department. The Scheme covers appeals filed under section 246A(1) (Appealable orders before Commissioner) or section 248 (Appeal by person denying liability to deduct tax) of the Income Tax Act, 1961.

CBDT Announcement for Appellants

The Faceless Appeal Scheme, 2020 applies to all the pending appeals and for further new appeals filed under the Income Tax Act. The Filing of Appeals in Form 35 is being disabled temporarily by CBDT to enable changes under the Scheme and will be made available shortly. Please click on the official link on Faceless Appeal Scheme, 2020 for reference

The objective of the Faceless Appeal Scheme, 2020

The announcement of the Faceless Appeal Scheme, 2020 was made by the Finance Minister while presenting the Union Budget 2020 on 01.02.2020. The objective faceless appeal scheme 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 Income Tax department.

Filing of Appeals Before Commissioner

The filing of appeals before Commissioner (Appeals) has already been enabled in an electronic mode. However, the first appeal process under the Commissioner 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 Income Tax e-filing portal. However, the process that follows after the filing of an appeal is neither electronic nor faceless. To ensure that the reforms initiated by the CBDT to eliminate human interface from the system reach the next level, an e-appeal scheme must be launched on the lines of the e-assessment scheme With the advent of the e-assessment scheme, most of the functions/ processes under the Income Tax Act, including of filing of the 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

Faceless Appeal Centers under the e-Appeal Scheme

For this Faceless Appeal Scheme, the Central Board of Direct Taxes (CBDT) will set up Faceless Appeal Centers.

• A National Faceless Appeal Centre - To facilitate the conduct of e-appeal proceedings in a centralized manner, which will be vested with the jurisdiction to dispose of the appeal following the provisions of this e-Appeal Scheme
• Regional Faceless Appeal Centers - To facilitate the conduct of e-appeal proceedings, which will be vested with the jurisdiction to dispose of the appeal under the provisions of this Scheme
• Appeal units - To facilitate the conduct of e-appeal proceedings along with the following process:
  • To perform the function of disposing appeal
  • Admitting additional grounds of appeal
  • Making further inquiry as thinks fit
  • Directing the National e-Assessment Centre or the Assessing Officer
  • For making further inquiry
  • Seeking information or clarification on admitted grounds of appeal
  • Providing the opportunity of being heard to the appellant
  • Analysis of the material furnished by the appellant
  • Review of the draft order
  • Specify their respective jurisdiction.

Note: All communication between the appeal unit and the appellant or the National e-Assessment Centre or the Assessing Officer concerning the information or documents will be through the National Faceless Appeal Centre.

Procedure for Filing Appeal as per the Faceless Appeal Scheme

The Procedure for Filing Appeal as per the Faceless Appeal Scheme is explained in detail below:

File Appeal 

A taxpayer can file an appeal through his registered account on the Income Tax e-filing portal.

Processing of Appeal

The National Faceless Appeal Centre will assign the appeal to a specific appeal unit in any one Regional Faceless Appeal Centre through an automated allocation system.

• If the appellant has filed the appeal after the expiration of the time specified in section 249 of the Income Tax Act, the appeal unit after the verification will admit the or reject the appeal, under intimation to the National Faceless Appeal Centre
• If the appellant has applied for exemption from the operation of clause (b) of sub-section (4) of section 249 of the Income Tax Act, the appeal unit will admit the appeal and exempt the taxpayer from the operation any good and sufficient reason will be recorded in writing;

The National Faceless Appeal Centre will intimate the admission or rejection of the appeal, to the appellant (taxpayer) If the appeal is admitted, the appeal unit will request the National Faceless Appeal Centre to obtain further information, a document from the appellant The appellant need to file a response to the notice within the date and time specified, with the National Faceless Appeal Centre The National e-Assessment Centre or the Assessing Officer will furnish a report in response to the notice within the date and time prescribed to the National Faceless Appeal Centre If the response is filed by the appellant or a report is furnished by the National e-Assessment Centre, the National Faceless Appeal Centre will send such response to the appeal unit

Filing of Additional ground of Appeal

The appellant can file additional grounds of appeal, specifying the reason for the omission of ground in the appeal filed by him. The National Faceless Appeal Centre will intimate the admission or rejection of the additional ground, to the appellant based on the verification report submitted by the National e-Assessment Centre or the Assessing Officer and the appeal unit. The appellant will file additional evidence, other than the evidence produced by him during proceedings before the National e-Assessment Centre or the Assessing Officer, as the case may be, in such form, as may be specified by the National Faceless Appeal Centre, specifying therein as to how his case is covered by the exceptional circumstances specified in sub-rule (1) of rule 46A of the Rules

Processing of Additional Evidence

The National Faceless Appeal Centre will send the additional evidence to the National e-Assessment Centre or the Assessing Officer for furnishing a report within the prescribed time. After the verification, the National Faceless Appeal Centre will intimate the admission or rejection of additional evidence to the appellant and the National e-Assessment Centre or the Assessing Officer.

• If the appeal unit intends to enhance an assessment or a penalty or reduce the amount of refund, the appeal unit will prepare a show-cause notice containing the reasons for the enhancement or reduction, and send such notice to the National Faceless Appeal Centre
• The National Faceless Appeal Centre will serve the notice upon the appellant. The appellant needs to file his response to the National Faceless Appeal Centre.
• If a response is filed by the appellant, the National Faceless Appeal Centre will send such a response to the appeal unit and inform the appellant.

Preparation of Draft Order

The appeal unit will prepare a draft order after verifying all the relevant material available on the record, including the response filed, report furnished by the National e-Assessment Centre. The draft order will be sent to the National Faceless Appeal Centre along with the details of the penalty proceedings. The National Faceless Appeal Centre shall upon receipt of the draft order, will send the details such as the aggregate amount of tax, penalty, interest, including surcharge and cess, payable in respect of issues disputed in appeal to the Regional Faceless Appeal Centre through an automated allocation system, for conducting a review of the order

Finalization of the Appeal

Regional Faceless Appeal Centre will finalize the appeal as per the draft order and send the draft order to an appealing unit for further processing. After examination of the draft order, the National Faceless Appeal Centre will finalize the appeal upon receipt of the revised draft order and pass the appeal order. National Faceless Appeal Centre will communicate the appeal order to the appellant (taxpayer)

Amendments in Section 250 of the Income Tax Act, 1961

Appropriate amendments have been carried out in section 250 of the Income Tax Act, 1961   for giving effect to the Faceless Appeal Scheme, 2020. Kindly refer to the documents attached here for understanding the amendments made in Finance Act, 2020.