India: Faceless Assessment Scheme introduced to simplify the process of tax proceedings
The case for faceless assessment is probably the single most prominent initiative, post GST, which has the potential to completely change the perception about tax enforcement machinery in the country. Structure of the scheme- A National Faceless Assessment Centre (NFAC) in New Delhi, headed by Principal Chief Commissioner or Principal Director General of Income Tax, would be set up acting as a single point of contact for assessees and assessment units
- Eight Regional Faceless Assessment Centres (RFAC) would be set up at Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Pune, Bengaluru and Hyderabad
- Each RFAC would comprise of assessment unit (AU), review unit, technical unit and verification unit
- NFAC would issue notices and allocate the case to any Assessment Unit in RFAC through an automated allocation system
- Any request for additional documents/evidence, search and enquiry shall be made by AU only through the NFAC and not directly to the assessee
- Replies would be sent to AU, which shall prepare the draft assessment order to be sent to NFAC and ultimately to the assessee
- NFAC shall send the draft order to a review unit. In case of any modification is proposed, the NFAC shall assign the case to another AU (other than the erstwhile AU), which shall consider the modifications and finalise the assessment order
- The scheme marks a shift from territorial jurisdiction to dynamic jurisdiction preventing nexus between participants which augment corruption
- The case for frivolous high-pitched assessments is significantly reduced owing to collective decision making
- Elimination of physical interface between tax authorities and the assessees provide ease of compliance and speedy completion of proceedings
- As digitalisation being the new normal, the tax-bureaucracy would perceive a plausible transformation with the advent of new scheme