Faceless Scheme of Assessment, Aim and Legal Framework

Context: The CBI has registered a case against nine individuals for allegedly attempting to undermine the Income Tax Department’s “Faceless Assessment Scheme.”

About the Faceless Scheme of Assessment

• The Faceless Assessment Scheme was introduced by the Income Tax Department in 2019 as part of the “Transparent Taxation – Honouring the Honest”
• Aim: To eliminate face-to-face interactions between taxpayers and tax officials, reducing corruption, ensuring objectivity, and improving efficiency in the tax assessment process.

Legal Framework

It is backed by Section 144B of the Income Tax Act, which mandates the following:

• No physical meetings between tax officers and taxpayers.
• All notices and responses are to be exchanged electronically.
• Randomized allocation of cases to ensure neutrality.

How the Faceless Assessment Works

The scheme operates through a fully digital and centralized system, involving multiple specialized units:

National e-Assessment Centre (NeAC)

• Acts as the central body for issuing notices and coordinating assessment-related communication.
• Allocates cases randomly to Regional e-Assessment Centres (ReACs).

Regional e-Assessment Centres (ReACs)

• Located in different parts of the country to handle assessment cases assigned by NeAC.
• Includes Assessment Units (AUs), Verification Units (VUs), Review Units (RUs), and Technical Units (TUs).

Digital Process Flow

• Automated Case Selection: Cases are selected through AI-driven risk analysis.
• Electronic Notices: All notices are sent digitally via the Income Tax portal.
• Submission by Taxpayer: Taxpayers submit responses and documents online.
• Assessment by Teams: Multiple teams independently review cases for fairness and accuracy.
• Final Order Issued: The final assessment order is sent electronically without any human interaction.

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