key changes in the new Faceless Appeal Scheme

 10 key changes in the new Faceless Appeal Scheme, which are 

listed below:

1. Compulsory to allow a personal hearing if requested :

The new scheme has replaced the word ‘may’ with ‘shall’ with respect to allowing requests for a personal hearing. Thus, it would be mandatory for the Commissioner 

(Appeals) to allow a personal hearing if the taxpayer requests it during e-proceedings.

2. No draft appeal order : 

The appeal unit was required to prepare a draft order in the previous scheme. The said draft order was then sent to another Appeal Unit for review. It was done in cases where the aggregate amount of tax, penalty, interest or fee, including surcharge and 

cess, payable in respect of disputed issues, exceeds the specified amount. There is no concept of a draft order in the new appeal scheme. The Commissioner 

(Appeals) shall prepare an appeal order and send it to National Faceless Appeal Centre (NFAC) after signing the same digitally. After that, the NFAC shall 

communicate such order to the appellant.

3. Role of Regional Faceless Appeal Centre is removed

Under the old scheme, the Regional Faceless Appeal Centres (RFACs) facilitated the 

conduct of e-appeal proceedings. They were vested with the jurisdiction to dispose of

the appeal in a faceless manner. When an appeal was filed, it was assigned by the National Faceless Appeal Centre to a specific appeal unit in any RFAC. Such appeal 

unit had one or more Commissioner (Appeals) who performed the actual eproceedings.

 

In the new scheme, the board has removed Regional Faceless Appeal Centres. Now, an appeal is directly assigned to the Commissioner (Appeals) of a specific Appeal 

Unit.

4. Cases will be assigned to the Commissioner (Appeals)

In the old scheme, the appeals were assigned to a specific appeal unit, and the Commissioner (Appeals) appointed under such appeal unit performed the eproceeding functions. Now, the National Faceless Appeal Centre (NFAC) shall assign the appeal directly to a Commissioner (Appeals) of the appeal unit.

5. Appeal Unit will have only one Commissioner (Appeals)

The erstwhile scheme of faceless appeal had provided that the appeal unit shall have one or more Commissioner (Appeals) and other income-tax authority/staff to assist 

them. Under the Faceless Appeal Scheme, 2021, the appeal unit shall have one Commissioner (Appeals) and other income-tax authority/staff to assist him.

6. No need to send a recommendation to NFAC to initiate penalty proceedings

Under the erstwhile scheme, for any non-compliance with any notice, direction or order, the Appeal Unit was required to send a recommendation to the NFAC to initiate penalty proceedings.

The new scheme has removed the requirement to send such a recommendation. The 

Commissioner (Appeals) has been authorized to send a notice to the appellant through the NFAC to initiate any penalty proceedings.

7. Penalty proceedings to be initiated by same Commissioner (Appeals)

In the erstwhile appeal scheme, NFAC assigns the initiation of penalty proceedings to a specific Appeal Unit in any one RFAC through an automated allocation system. This Appeal Unit may or may not be the same unit that completed the appeal proceedings.

However, in the new appeal scheme, the same Commissioner (Appeals) who has completed the appeal proceedings is authorized to conduct penalty proceedings.

8. No exemption from paying tax in case of a non-filer of return

Proviso to Section 249(4)(b) provides that where an assessee has not filed the return of 

income, the CIT(A) shall not admit appeal unless an amount equal to the advance tax payable by him has been paid. However, for good and sufficient reasons recorded in 

writing, the CIT(A) may exempt the assessee from the requirement of payment of such tax. 

In the erstwhile appeal scheme, it was provided that in such cases, an Appeal Unit may admit an appeal and exempt the appellant from payment of tax for any good and sufficient reason to be recorded in writing.

 

The relevant clause has been dropped in the new scheme. It is unclear whether it is an inadvertent omission or the board has deliberately decided not to exempt an appellant from paying the required tax before filing an appeal. As Proviso to Section 249(4)(b) allows such an exemption, it cannot be taken away by a scheme notified under the delegated legislation.

9. Orders passed by Commissioner (Appeals) to be digitally signed 

Under the new Faceless Appeal Scheme, all the orders (appeal order, penalty order,

or rectification order) shall be signed digitally by the Commissioner (Appeals) before 

sending to National Faceless Appeal Centre. There were no such provisions of signing 

orders digitally by the Appeal Units in the previous scheme.

10. National e-Assessment Centre renamed to National Faceless Assessment Centre

The CBDT has renamed the National e-Assessment Centre to National Faceless Assessment Centre. However, the board has already changed the name vide Circular 

F. No. 187/3/2020-ITA-I, dated 8-4-2021, but that was done in the Faceless Assessment 

Scheme, 2019. 

Now, the same has been incorporated in the Faceless Appeal Scheme, 2021.