Faceless income tax assessment and how does it work?

Faceless Income Tax Assessment as the name itself suggests is done without any physical meeting. Faceless Income Tax Assessment is mostly done through correspondence with income tax department officials based on your assessment order and return of income filed by you. 

Faceless Income Tax Assessment Order cannot be cancelled. Faceless Income Tax Assessment Order remains in force until you surrender your PANs and TANs. Faceless Income Tax Assessment Order overrides all other types, and cannot be countermanded or modified by any authority. Faceless income tax assessment is a scheme introduced by the CBDT to provide relief from repeated filings of income tax returns. Faceless taxation enables businesses like firms, partnerships, and proprietorship concerns with annual turnovers of less than Rs 5 crore to file their ITRs only once every five years (instead of annually) while maintaining compliance with other compliances such as filing monthly sales/turnover return, VAT, etc.

When is Faceless IT Assessment commonly used?

Faceless income tax assessment procedure can be tried in the following situations:

-If you do not want to appear before a revenue office for personal reasons (e.g. if you are not available because of employer’s transfer out of the station, short stay abroad, or political turmoil prevailing in your place which does not permit trips). If this reason is genuine, then a faceless income tax assessment can be opted for. 

What else should you know?

Faceless income tax assessment must not be used as a convenient way to avoid income tax assessment. Faceless income tax assessment is only available for residents of India. 

What should a Faceless Income Tax Assessment Order contain?

– A statement saying that you have been granted faceless assessment by the Principal Commissioner;

– The contact details of the designated official who has been assigned to handle faceless income tax assessment for your business along with all the documentation required to file for ITR.

– A statement asking you to surrender all your current PANs and TANs listed in the order, within 30 days of receipt of the Faceless Income Tax Assessment Order from an authority. 

Faceless Income Tax Assessment Procedure Faceless income tax assessment procedure effectively means that you will not be asked to appear before a revenue officer, but your returns and related communication will be done through correspondence with the I-T department officials listed in the faceless income tax assessment order. 

Faceless income tax assessment is a communication process between CAs and the Income Tax Department which allows CAs to file ITRs online, receive and reply to notices issued by the department, read important government circulars, and act upon them. CAs can also request information pertaining to their clients from the department through this process.

This procedure was earlier applicable only for CAs who were members of CA societies, but now it has been extended by the CBDT-IT (Directorate General of Income Tax) to all CAs.

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