Income tax returns: CBDT announces fresh guidelines to streamline faceless assessment system for taxpayers

The Central Board of Direct Taxes (CBDT) announced a new set of internal guidelines for income tax department assessing officers in order to reduce “procedural errors” and streamline the faceless assessment system for taxpayers, on Thursday.

According to the most recent directions, the assessing officer (AO) will be required to issue a show reason notice to a taxpayer in whose case "any variation prejudicial to the interest of the assessee is suggested" or to indicate where an action against the assessee is intended.

The guidelines from the CBDT come in the backdrop of another order for the creation of ‘local committees’ under respective chief commissioners to look into grievances relating to “high pitched” assessments.

“A monitoring committee of the Central Board of Direct Taxes (CBDT) has also been put in place to monitor the work done by the local committees,” a senior officer told PTI.

The faceless assessment units have been instructed by the Central Board of Direct Taxes (CBDT) to establish plans for completing assessments in a methodical and timely manner. Additionally, it instructed tax officials to maintain items involving refunds, penalties, and reassessments as "priority" for the first half of the current fiscal year (2022-23).

Till now, the income tax department has completed over 2.8 lakh cases under the faceless assessment scheme (FAS) that was launched by the government in 2019-20

According to officials, the faceless assessment regime is continuously enhanced and improved, and any complaint raised by taxpayers and related stakeholders is taken into consideration.

"Several checks and alerts apart from systemic intervention have been introduced by CBDT as part of the latest SOPs to minimize the incidence of procedural errors at the level of the faceless assessing officer, officials said.

According to the revised SOPs, a final assessment decision under the faceless scheme won't be approved unless a number of requirements have been satisfied, including "before issue" of a show cause notice in cases where any suggested adjustment would be detrimental to the assessee's interests.