3. Faceless Assessments
Upload Date
30/04/2026
3.1. Key characteristics of new faceless regime of assessments
The assessments under Section 144B of the Income-tax Act, 1961 are more popularly referred to as the 'Faceless Assessments' or the 'Jurisdiction-less Assessments'. Let us understand why these assessments are being referred so.
(a) Faceless assessments: These assessments are being referred to as 'Faceless' simply because the assessee will not get to see the face of his/her assessing officer. In other words, the assessee will not be able to know who will conduct his/her assessments. The faceless assessments completely eliminate the physical interface between the assessee and the assessing authority and instead involves the electronic interface right from the selection of the cases for the scrutiny purpose with the help of an 'automated allocation system' involving an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimising the use of resources, and the conduct of assessments exclusively in electronic mode via the 'e-Proceedings' utility of the e-Filing portal of Income-tax department's website, and finally the review and examination of the assessment orders using 'automated examination tool' involving therein an algorithm for standardised examination of draft assessment orders, by using suitable technological tools, including artificial intelligence and machine learning, with a view to reducing the scope of discretion.
(b) Jurisdiction-less assessments: These assessments are referred to as 'Jurisdiction-less' because these are conducted by a Team/Group of Expert Income Tax Officers at multiple-level units, viz. National Faceless Assessment Centre (NaFAC), Assessment Unit, Verification Unit, Technical Unit and Review Unit, and are not conducted by an individual jurisdictional assessing officer. The cases shall be assigned by NaFAC to an assessment unit based on an 'automated allocation system' involving an algorithm for the randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning.
3.2. Restructuring and re-organisation of the income tax department
Section 144B(3) provides that the CBDT may, for the purposes of conduct of faceless assessment, set up the following Centre and units and specify their functions and jurisdiction, namely:
(1) National Faceless Assessment Centre to facilitate the conduct of faceless assessment proceedings in a centralised manner;
(2) Assessment units, to conduct the faceless assessment, to perform the function of making the assessment, which includes identification of points or issues material for the determination of any liability (including refund) under the Act, seeking information or clarification on points or issues so identified, analysis of the material furnished by the assessee or any other person, and such other functions as may be required for the purposes of making a faceless assessment, and the term "assessment unit", wherever used in this section, shall mean an assessing officer having powers so assigned by the Board;
(3) Verification units, to facilitate the conduct of faceless assessment, to perform the function of verification, which includes enquiry, cross verification, examination of books of account, examination of witnesses and recording of statements, and such other functions as may be required for the purposes of verification and the term "verification unit", wherever used in this section, shall mean an assessing officer having powers so assigned by the Board. Also, the function of VU for faceless assessment may also be performed by a VU located in any other faceless centre set up under the provisions of the Act or under any scheme notified under the provisions of the Act, and the request for verification may also be assigned through the NaFAC to such verification unit.
(4) Technical units, to facilitate the conduct of faceless assessment, to perform the function of providing technical assistance, which includes any assistance or advice on legal, accounting, forensic, information technology, valuation, transfer pricing, data analytics, the management or any other technical matter under the Income-tax Act or an agreement entered into under section 90 or section 90A which may be required in a particular case or a class of cases, under this section and the term "technical unit", wherever used in this section, shall mean an assessing officer having powers so assigned by the Board.
(5) Review units, to facilitate the conduct of faceless assessment, to perform the function of the review of the income determination proposal assigned to it, which includes checking whether the relevant and material evidence has been brought on record, relevant points of fact and law have been duly incorporated, the issues requiring addition or disallowance have been incorporated and such other functions as may be required for the purposes of review and the term "review unit", wherever used in this section, shall mean an assessing officer having powers so assigned by the Board.
3.3. Procedure of conduct of faceless assessments
All regular assessments in Section 143(3), income escaping assessments or re-assessments in Section 147, and best judgement assessments in Section 144 of the Income Tax Act, except those cases falling under the Central Charges, i.e., search and survey cases, and international taxation charges, are to be conducted in a faceless manner, as per the procedure and manner stipulated in Section 144B of the Income Tax Act, 1961.
Section 144B(1) stipulates the modified procedure of the conduct of faceless assessments as under:
(1) Assignment of case on an automatic allocation basis and intimation to the assessee by NaFAC: The National Faceless Assessment Centre (NaFAC) shall assign the case selected for the purposes of faceless assessment to a specific assessment unit (AU) through an automatic allocation system and intimate the assessee that assessment in his case shall be completed as per the said section.
(2) Serving of notice & furnishing of response by the assessee through NaFAC: The assessee shall be served a notice under Section 143(2) or under Section 142(1) of the Act through the NaFAC. The assessee may file his response to the aforementioned notice, within the date specified in such notice, to the NaFAC, which shall forward the same to the AU.
(3) Requisition for further information from the assessee by AU through NaFAC: The AU may make a request, through the NaFAC, for obtaining such further information, documents or evidence from the assessee or any other person, as it may specify, and the NaFAC shall serve appropriate notice or requisition on the assessee or any other person for obtaining the same.
(4) Request by AU through NaFAC for assistance in the enquiry by Verification Unit: The AU may also make a request, through the NaFAC, for conducting enquiry or verification by Verification Unit (VU), and the request shall be assigned by the NaFAC to a VU through an automated allocation system.
(5) Request by AU through NaFAC for technical assistance by Technical Unit: The AU may also make a request for a reference to the Technical Unit (TU) for seeking technical assistance in respect of the determination of arm's length price, valuation of property, withdrawal of registration, approval, exemption or any other technical matter and the request shall be assigned by the NaFAC to a TU through an automated allocation system.
(6) Sending reports received from VU & TU by NaFAC to AU: The NaFAC shall send any report received from the VU or TU to the AU.
(7) Furnishing of response by Assessee: The assessee or any other person, as the case may be, shall file his response within the specified or extended time, in compliance with the said notice served by NaFAC, at the request of AU, to the NaFAC, which shall forward the reply to the AU.
(8) Intimation of failure of the assessee to respond: If the assessee fails to comply with the said notice served by NaFAC, at the request of AU, or the earlier notice under Section 143(2) or under Section 142(1), the NaFAC shall intimate the same to the AU.
(9) Issuing of show cause notice (SCN) under Section 144 to assessee: The AU shall serve upon the assessee, through NaFAC, a show cause notice under Section 144 giving him the opportunity to explain why the assessment in his case should not be completed to the best of its judgement.
(10) Furnishing of response by the assessee to SCN: The assessee shall file his response to the show-cause notice under Section 144 of the Act, within the time specified in such notice or approved extended time, to the NaFAC which shall forward the same to the AU.
(11) Preparation of income or loss determination proposal by AU:
a) If the assessee fails to respond, the NaFAC shall intimate the same to the AU. After taking into account all the relevant material available on the record, the AU shall prepare in writing an income or loss determination proposal where no variation prejudicial to the assessee is proposed and send the same to the NaFAC.
b) In any other case, the AU shall serve a show cause notice on the assessee stating the variations proposed to be made to the income of the assessee and calling upon him to submit why the proposed variation should not be made through the NaFAC.
c) The assessee shall file his reply to such show cause notice, to the NaFAC, on the date and time as specified in the notice or within the approved extended time, and NaFAC shall forward the reply to the AU.
d) If the assessee fails to respond within the specified or extended time, the NaFAC shall intimate the same to the AU.
e) After considering the response of the assessee or the intimation of failure of the assessee to file a response received from NaFAC and all relevant material available on the record, the AU shall prepare an income or loss determination proposal and send the same to the NaFAC.
(12) Personal Hearing through Video Conferencing
a) in a case where a variation is proposed in the income or loss determination proposal or the draft order, and an opportunity is provided to the assessee by serving a show cause notice upon him, the assessee or his authorised representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the income-tax authority of the relevant unit.
b) Where the request for a personal hearing has been received, the income-tax authority of the relevant unit shall allow such a hearing through NaFAC, which shall be conducted exclusively through video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board.
c) Any examination or recording of the statement of the assessee or any other person (other than the statement recorded in the course of survey under section 133A) shall be conducted by an income-tax authority in the relevant unit, exclusively through video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board.
(13) Action on income or loss determination proposal & preparation of draft order in case of assessee other than eligible assessee under Section 144C:
a) Upon receipt of such income or loss determination proposal, with or without any variations proposed to the income of the assessee, as the case may be, the NaFAC may, on the basis of guidelines issued by the Board, convey to the AU to prepare draft order in accordance with the income or loss determination proposal, and the AU shall thereafter prepare a draft order.
b) The NaFAC may also assign the income or loss determination proposal to a Review Unit (RU) through an automated allocation system, which shall conduct a review of such order, prepare a review report and send it to NaFAC.
c) The NaFAC shall forward the review report received from the RU to the AU, which had proposed the income or loss determination proposal. The AU may accept or reject some or all of the modifications proposed in such review report, prepare a draft order accordingly, and send it to NaFAC.
(14) Passing of final assessment order in case of assessee other than eligible assessee under Section 144C:
a) In any case, other than that of the eligible assessee under Section 144C, the NaFAC shall convey to the AU to pass the final assessment order in accordance with such draft order, which shall thereafter pass the final assessment order and initiate penalty proceedings, if any, and send it to the NaFAC.
b) The NaFAC shall serve a copy of the final assessment order, notice for initiating penalty proceedings, if any and the demand notice to the assessee.
(15) Preparation of draft order & passing of final assessment order, in case of eligible assessee under Section 144C:
a) The NaFAC shall, upon receiving a draft order in a case of an eligible assessee, where there is a proposal to make any variation which is prejudicial to the interest of such assessee under Section 144C(1), serve such draft order on the assessee.
b) An eligible assessee, as referred to in Section 144C, has to file his acceptance of the variations proposed in such draft order or file objections, if any, to such variations with the Dispute Resolution Panel, under Section 144C and the NaFAC, within the period specified in sub-section (2) of the said section.
c) In case the variations proposed in the draft order are accepted by the assessee or not objected to within the time given in Section 144C(2), the NaFAC shall inform the AU of the same, which shall pass the assessment order, on the basis of the draft order, within the time allowed under Section 144C(4) and initiate penalty proceedings, if any, and send the order to the NaFAC.
d) Where the eligible assessee files objections with the Dispute Resolution Panel against the variations proposed in the draft order in his case, the NaFAC shall send such intimation along with a copy of such objections to the AU.
e) Upon receipt of the directions issued by the Dispute Resolution Panel in the case of an eligible assessee, the NaFAC shall forward such directions to the AU.
f) The AU shall complete the assessment within the time allowed in Section 144C(13) and initiate penalty proceedings, if any, in conformity with the directions issued by the Dispute Resolution Panel under Section 144C(5), and send a copy of the assessment order to the NaFAC.
g) The NaFAC shall, upon receipt of the final assessment order, in the case of an eligible assessee under Section 144C or in other cases, serve a copy of such order and notice for initiating penalty proceedings, if any, on the assessee, along with the demand notice.
(16) Communication between units
All communications:
i. among the assessment unit, review unit, verification unit or technical unit or with the assessee or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making a faceless assessment shall be through the National Faceless Assessment Centre;
ii.between the National Faceless Assessment Centre and the assessee, or his authorised representative, or any other person shall be exchanged exclusively by electronic mode; and
iii. between the National Faceless Assessment Centre and various units shall be exchanged exclusively by electronic mode:
However, the board may specify circumstances wherein the enquiry or verification conducted by the verification unit may not be communicated in electronic mode.
The CBDT vide Order F. No. 187/7/2024-ITA-I, Dated 1-8-2024, has specified the following circumstances, for the purpose of enquiry or verification functions by the Verification Unit:
- Non-availability of digital footprint in respect of the assessee or any other person.
- Electronic or Online verification is not possible on account of no response to notice issued to the assessee or any other person.
- Physical verification of assets or premises or persons is required, regardless of the presence of digital footprint.
(17) Completion of faceless assessment & transfer of assessment records to JAO:
The NaFAC shall, after completion of the assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over the said case for such action as may be required under the Income-tax Act.
3.4. Step-by-step guide to 'Faceless Assessment Proceedings' under Section 144B
Step 1: Visit the 'e-filing portal':
The assessee is required to visit the 'e-filing portal' from the link: https://www.incometax.gov.in/iec/foportal
Step 2: Log-in the account
Click on the 'login' button located on the top right side of the screen. On the next screen, fill in the 'user id', which is the 'PAN', and click 'Continue'. Then enter the 'password' and click 'continue' to complete the login.
Step 3: Go to 'e-Proceedings' tab:
After login, go to 'Pending Actions > e-Proceedings'. The assessee is redirected to a new page of 'View e-Proceedings related to', which displays all the 'assessment notices' under Section 143(1)(a)/143(2)/147/139(9)/270A, for different assessment years, which the assessee might have received.
Step 4: View the Assessment/Re-assessment Notices
To view the regular assessment proceeding details under Section 143(3), click 'Assessment Proceedings under Section 143(3)/147 > 'View Notices'.
Step 5: Select the Notice to Respond
In the sub-window of 'Assessment Proceedings u/s 143(3)/147', the assessee can see all the notices, say under Section 143(2) or 142(1), issued for that particular assessment year.
This sub-window provides three tabs of (i) View Response; (ii) Notice/Letter Pdf, and (iii) Seek/View Adjournment.
In order to access the relevant notice, click 'Notice/Letter Pdf' tab. The assessee can seek adjournment by clicking "Seek Adjournment", after providing the reason for seeking an adjournment.
Step 6: Download the Assessment Notice
To download the notice, go to 'Pending Actions > e-Proceedings > View Notices > Detailed Notices'. Click on the 'Download' tab at the bottom of the page to download the assessment notice.
After downloading the assessment notice, the assessee can view the scrutiny notice sent by the AO containing the following details:
• PAN of the Assessee
• Address of the Assessee
• Section under which Notice has been issued
• Assessment Year
• Notice No.
• Date of issuing Notice
• Purpose for sending the Notice
• Questionnaire, if the notice is issued under Section 142(1).
Under the faceless regime under Section 144B, the notices under Section 143(2) of the Act are not issued by the jurisdictional Assessing Officer but by the National Faceless Assessment Centre (NaFAC).
Step 7: File 'e-Response' to Notice under Section 143(2)
For the purpose of filing/furnishing a 'reply' in response to a notice under Section 143(2), click on the tab 'Submit Response' tab,
Step 8: Tips for filing responses
(a) Partial responses: If the assessee is submitting a response on a piecemeal basis, he needs to choose 'response type' as 'partial'.
(b) Full response: If the submissions have been made on a piecemeal basis, then there would be multiple 'partial responses'. After submitting the 'last partial response', update the 'Response type' to 'Full Response'. If the assessee wants to file just one response to the scrutiny notice, then opt for 'Full Response' in 'response type'.
(c) Multiple Responses: The assessee can submit 'multiple responses' to any single scrutiny notice.
(d) Brief remark to response: The assessee may also furnish a brief 'remark' to its response under the tab 'Add Written Response/Remarks'. The remark cannot exceed 4,000 characters.
(e) Uploading of supporting documents: The assessee may attach the supporting documents as 'attachments' to substantiate his response/submission by choosing different specified categories of attachments mentioned in the dropdown list. The assessee can attach scanned documents in .pdf, .xls, .xlsx, and .csv format. If the supporting document is not in the specified format, choose 'Others' from the dropdown list for attaching such documents. A maximum of 10 attachments/files can be uploaded, with each attachment not exceeding 5 MB. If the limit is exhausted, the assessee can opt for a 'partial response' to upload the remaining attachments.
(f)Name of attachments: Ensure that the names of the two attachments are not the same and should not exceed 100 characters. Only two special characters, hyphen '-' and underscore '_', are permitted in the attachments' name. If the name of the attachment is not as per the guidelines, it will result in an error in uploading the entire submission.
(g) Window closure: The facility to submit a response gets auto-closed seven days before the time-barring date of the regular assessment. If there is no time barring date, the AO can close the e-submission if the final order or decision is being prepared. Once the assessment proceeding is closed or completed in ITBA, there will be no e-submission allowed from the assessee.
Step 9: Calling of further information, documents or evidence from the assessee by way of issue of notice under Section 142(1) by the Assessment Unit through NaFAC
The Assessment Unit to which the case has been assigned by the NaFAC may make a request to the NaFAC to obtain such further information, documents or evidence from the assessee or any other person, as it may specify.
Where a request for obtaining further information, documents or evidence from the assessee or any other person has been made by the Assessment Unit, the NaFAC issues appropriate notice or requisition under Section 142(1) to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the Assessment Unit.
Step 10: View and retrieve scrutiny questionnaire under Section 142(1) and file 'e-Response'
The initiation of the assessment proceedings by the issue of scrutiny notice under Section 143(2) is proceeded further by issuing a scrutiny questionnaire under Section 142(1) of the Act.
The assessee can access the notice under Section 142(1) by clicking the 'Notice/Letter Pdf' tab. The assessee can download the pdf file of such notice by clicking the 'Download' tab.
The assessee is required to file his 'e-responses' and attach the supporting records and documents in the same manner as in filing of his 'e-response' to notice under Section 143(2) as discussed above.
Step 11: View 'e-Responses'
After submitting the 'e-responses', if the assessee wishes to view the responses filed, he can view them by clicking the link of 'View Response'.
Step 12: Download 'e-Responses/Submissions' along with supporting attachments
The assessee may download all the filed submissions along with the corresponding attachments by clicking the links under the tab 'Attachment'.
Step 13: Preparation of Income or Loss Determination Proposal by Assessment Unit
The assessment unit, after taking into account all the relevant material available on the record, and the replies furnished electronically by the assessee, prepare in writing an Income or Loss Determination Proposal, either accepting the returned income of the assessee or modifying the returned income of the assessee, as the case may be, and send a copy of such proposal to the NaFAC.
Step 14: Examination of the Income or Loss Determination Proposal by NaFAC & Issue of a Show Cause Notice to Assessee
The NaFAC examines the Income or Loss Determination Proposal in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to:
(a) finalise the assessment as per the draft order prepared on the basis of such Income or Loss Determination Proposal and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, along with the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment; or
(b) The NaFAC shall provide an opportunity to the assessee, in case a modification is proposed, by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the Income or Loss Determination Proposal/draft order; or
(c) Assign the Income or Loss Determination Proposal to a Review Unit, through an automated allocation system, for conducting review of such proposal.
Step 15: Filing of 'e-Response' by the assessee to the show-cause notice
The assessee is required to file his 'e-response' to such show-cause notice and upload the relevant supporting records and documents as attachments in the same manner as discussed above.
Step 16: Passing of the final assessment order by NaFAC
The NaFAC forwards the 'e-Responses' of the assessee to the show cause notice to the Assessment Unit, which in turn, after taking due cognisance of all the e-responses of the assessee, passes the revised draft assessment order. If the assessee so requires, the NaFAC shall provide the assessee with the opportunity of personal hearing via video telephony.
The assessment unit, after taking cognisance of the inputs from such personal hearing as provided to it by NaFAC, again passes the final assessment order, which is uploaded by NaFAC in the registered 'e-Filing' account of the assessee within the time barring limitation period of completion of assessments under Section 143(3) of the Act. The assessment order can be seen and downloaded by clicking the " Download Closure Order" button in the main window by clicking on the icon "For Your Information", under the 'e-proceedings' tab.
Step 17: Transferring all assessment records to Jurisdictional AO
The NaFAC transfers the final assessment order, and all the assessment records to the file of jurisdictional AO for imposing penalty, and recovery of outstanding income tax demand, if any.