Get A Personal Hearing Under The Faceless Penalty Scheme

The Central Board of Direct Taxes (CBDT) has notified an modification within the Faceless Penalty Scheme, permitting obligatory personal listening to via video conferencing to any taxpayer who has requested for it. With this modification, consultants imagine that the taxpayers going via the penalty proceedings can current their circumstances to the tax authorities in a extra elaborate method. This can also be anticipated to handle the difficulty of pure justice because the assessee can ask for a personal listening to as a matter of proper and the identical should be allowed. 

What is the scheme? 

The Faceless Penalty Scheme was launched in 2021 alongside the strains of The Faceless Assessment Scheme, 2019. As the identify suggests, all of the penalty proceedings beneath the Income Tax (I-T) Act are carried out electronically beneath this scheme with none human interface. Before the introduction of the Faceless Penalty Scheme, taxpayers had been required to go to the office of the tax authority to reply to 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 revenue. A taxpayer, who has purpose to imagine that there is no such thing as a under-reporting of revenue and so penalty will not be relevant, has to reply to 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 approach of submitting submissions and meeting a tax officer was carried out away with beneath this scheme and all steps, from begin to finish, shall be undertaken electronically,” said Saurrav Sood, practice leader (international tax), SW India. “Even the old cases under which the penalty proceedings were kept in abeyance were also transferred to Faceless Penalty Scheme,” Sood added.

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

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


While it was a welcome transfer to shift the whole 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 consultants. 

 “Earlier there was all the time a chance to satisfy the assessing officer in particular person, make a submission and clarify the deserves of the case,” stated Sood from SW India. 

The latest modification to the Faceless Penalty Scheme to mandatorily permit personal listening to through video conferring or video telephony, when taxpayers search it, is predicted 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 method to the tax authority, they will achieve this throughout the personal listening to through video conferencing,” added Sood. 

“The modification within the faceless penalty scheme will deliver uniformity with the opposite faceless schemes comparable to faceless evaluation scheme and faceless attraction scheme whereby personal listening to via video conferencing has been given as a compulsory proper to taxpayers,” Said Sandeep Sehgal, tax associate, AKM Global. 

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

On the question of whether or not language could be any barrier for taxpayers throughout the personal listening to with tax authorities, Sood stated all of the proceedings are carried out in English language.

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