Get a private listening to beneath the Faceless Penalty Scheme

The Central Board of Direct Taxes (CBDT) has notified an modification within the Faceless Penalty Scheme, permitting necessary private listening to by video conferencing to any taxpayer who has requested for it. With this modification, specialists imagine that the taxpayers going by the penalty proceedings can current their instances to the tax authorities in a extra elaborate method. That is additionally anticipated to handle the problem of pure justice because the assessee can ask for a private listening to as a matter of proper and the identical should be allowed. 

What’s the scheme? 

The Faceless Penalty Scheme was launched in 2021 alongside the traces of The Faceless Evaluation Scheme, 2019. Because the identify suggests, all of the penalty proceedings beneath the Revenue Tax (I-T) Act are carried out electronically beneath this scheme with none human interface. Earlier than the introduction of the Faceless Penalty Scheme, taxpayers have been required to go to the workplace of the tax authority to answer any present trigger discover issued for the penalty. 

Let’s say, a taxpayer is issued a present trigger discover stating why a penalty beneath part 270A of the I-T Act shouldn’t be levied for under-reporting of earnings. A taxpayer, who has cause to imagine that there isn’t any under-reporting of earnings and so penalty isn’t relevant, has to answer the discover by submitting an argument with supporting paperwork by visiting the tax division. 

From 12 January 2021—when the Faceless Penalty Scheme was launched —one should submit all paperwork electronically with none human interface. “The erstwhile method of submitting submissions and assembly a tax officer was executed away with beneath this scheme and all steps, from begin to finish, shall be undertaken electronically,” mentioned Saurrav Sood, follow chief (worldwide tax), SW India. “Even the previous instances beneath which the penalty proceedings have been saved in abeyance have been additionally transferred to Faceless Penalty Scheme,” Sood added.

Additional, there was additionally an choice given to a taxpayer beneath the scheme to hunt for private listening to by way of video convention whereas responding to the present trigger discover of penalty. But it surely was on the discretion of the tax authority to simply accept or reject the taxpayers’ request for a private listening to. 

Subsequently, the taxpayers should abide by the penalty order handed by the tax authority, until they resolve to attraction in opposition to the order. 


Whereas it was a welcome transfer to shift the complete means of penalty proceedings to digital mode, this didn’t permit for direct interplay with the assessing officer beneath the Faceless Penalty Scheme, as per specialists. 

 “Earlier there was all the time a chance to fulfill the assessing officer in individual, make a submission and clarify the deserves of the case,” mentioned Sood from SW India. 

The latest modification to the Faceless Penalty Scheme to mandatorily permit private listening to by way of video conferring or video telephony, when taxpayers search it, is anticipated to enhance the effectivity of the system.  “When the case is subjective and if the taxpayer desires to clarify the case in a extra elaborate technique to the tax authority, they’ll accomplish that through the private listening to by way of video conferencing,” added Sood. 

“The modification within the faceless penalty scheme will convey uniformity with the opposite faceless schemes similar to faceless evaluation scheme and faceless attraction scheme whereby private listening to by video conferencing has been given as a compulsory proper to taxpayers,” Stated Sandeep Sehgal, tax associate, AKM World. 

The entire system of penalty proceedings is centralized and every case could be randomly allotted to any tax authority throughout the nation. 

On the query of whether or not language could be any barrier for taxpayers through the private listening to with tax authorities, Sood mentioned all of the proceedings are carried out in English language.

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