Direct Tax Alert - CBDT excludes certain assessment from the Faceless Assessment Scheme

Background

With a view to bring transparency in assessment proceedings, the Faceless Assessment Scheme, 2019 (the Scheme) was introduced. Subsequently, the Taxation & Other Laws (Relaxation & Amendment of Certain Provisions) Act, 2020 codified this Scheme¹ by introducing section 144B in the Income-tax Act, 1961 (IT Act). In order to implement the Scheme, CBDT issued an order² directing that all the Assessment Orders be passed by the National Faceless Assessment Centre (NFAC) barring few exceptions. Subsequently, CBDT issued orders³ to extend the exclusions from the Scheme to assessment orders:

Recently, the CBDT has issued another order⁴ to expand the exclusion list. We, at BDO in India, have analysed and summarized the said order hereunder:

Orders excluded from faceless assessment scheme

The exclusion will be applicable to assessment orders which satisfies following conditions:

• The time limit for passing the order expires on 31 March 2022;
• The matter is pending with the jurisdictional Tax Officer as on 15 March 2022 or thereafter;
• It could not be completed as per the procedure laid down under section 144B of the IT Act due to technical / procedural constraints in the given period of limitation.

BDO Comments

With the deadline for completing the assessment nearing, this order will clear the air on completing the assessment that were stuck due to technical glitch. The order also clarifies that this exclusion is only with respect to pending matters whose time limit for completion is 31 March 2022. Hence, for assessment which is getting time barred post 31 March 2022, this order shall not be applicable.

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