CBDT notifies Faceless Penalty Scheme, 2021

Central Board of Direct Taxes (CBDT) has issued Notification No. 02/2021 dated 12th January, 2021 to notify Faceless Penalty Scheme, 2021. Penalty under this scheme shall be imposed in respect of such territorial area, or persons or class of persons, or income or class of income or cases or class of cases, or penalties or class of penalties as may be specified by the Board.

Key Points of the Faceless Penalty Scheme are :

A. Setting up of Faceless Penalty Centers:

1) Board may set up (i) National Faceless Penalty Centre (ii) Regional Faceless Penalty Centres (iii) penalty units (iv) penalty review units in order to facilitate the conduct of faceless penalty proceedings;
2) All communication with the assessee or any other person, as the case may be with respect to the information or documents or evidence or any other details as may be necessary for the purposes of imposing penalty under this Scheme, shall be through the National Faceless Penalty Centre.
3) The penalty shall be levied under this Scheme as per the procedure detailed laid in the Notification.

B. Rectification Proceedings:

4) The National Faceless Penalty Centre may, by an order to be passed in writing, amend any order passed by it under this Scheme with a view to rectify any mistake apparent from the record.

5) An application for rectification of mistake, may be filed with the National Faceless Penalty Centre by the assessee or any other person, as the case may be and it shall assign such application to a specific penalty unit in any one of the Regional Faceless Penalty Centres through an automated allocation system.

6) The penalty unit shall examine the application and prepare a notice for granting the following opportunities and send the notice to the National Faceless Penalty Centre. –
a) to the assessee or any other person, as the case may be, where the application has been filed by the authorities
b) to the authorities where the application has been filed by the assessee or any other person, as the case may be

7) The National Faceless Penalty Centre shall serve the notice, as per draft upon the assessee or any other person, as the case may be, or authorities to show cause as to why rectification of mistake should not be carried out under the relevant provisions of the Act, specifying the date and time for filing a response.

8) The response to the show-cause notice shall be furnished within the specified date and time or such extended time as may be allowed on the basis of application made in this behalf, to the National Faceless Penalty Centre, who shall send such response to the penalty unit, or where no such response is filed, inform the penalty unit

9) The penalty unit shall, after taking into consideration the response, if any shall prepare a draft order and send the order to the National Faceless Penalty Centre.
(a) for rectification of the mistake; or
(b) for rejection of application for rectification, citing reasons thereof,

10) The National Faceless Penalty Centre shall upon receipt of draft order, as referred to in sub-paragraph (8), pass an order as per such draft and communicate such order to, –
(a) the assessee or any other person, as the case may be; and
(b) the National Faceless Assessment Centre or the income-tax authority having jurisdiction over the case, for such action as may be required under the Act.

C. Authentication and Delivery of Electronic Records:

11) An electronic record shall be authenticated by the assessee or any other person, by affixing his digital signature if he is required under the Rules to furnish his return of income under digital signature, and in any other case by affixing his digital signature or under electronic verification code;

12) Every notice or order or any other electronic communication under this Scheme shall be delivered to the addressee, being the assessee or any other person, by way of,––
(a) placing an authenticated copy thereof in the assessee’s or any other person’s registered account, as the case may be; or
(b) sending an authenticated copy thereof to the registered email address of the assessee or any other person, as the case may be, or his authorised representative; or
(c) uploading an authenticated copy on the assessee’s or any other person’s Mobile App, as the case may be, and

D. No personal appearance in the centres or units:

13) A person shall not be required to appear either personally or through authorised representative in connection with any proceedings under this Scheme before the income-tax authority at the National Faceless Penalty Centre or Regional Faceless Penalty Centre or penalty unit or penalty review unit set up under this Scheme and may request for personal hearing so as to make his oral submissions or present his case before the penalty unit under this Scheme

14) The request for personal hearing which has been approved by the Chief Commissioner or the Director General, in charge of the Regional Faceless Penalty Centre, shall be conducted exclusively through video conferencing, including use of any telecommunication application software which supports video telephony, in accordance with the procedure laid down by the Board.

15) The Board shall establish suitable facilities for video conferencing including telecommunication application software which supports video telephony at such locations as may be necessary, so as to ensure that the assessee, or his authorised representative, or any other person is not denied the benefit of this Scheme merely on the ground that such assessee or his authorised representative, or any other person does not have access to video conferencing at his end.

For further details please refer the attached document.

 

Source: Central Board of Direct Taxes (CBDT)

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