Amendments proposed in the provisions relating to extension of timeline for issuing directions upto 31/03/2024 in respect of Faceless Schemes u/s 92CA, 144C, 253 and 264A of the Income Tax Act, vide Clauses 24, 43, 70 and 71 of the Finance Bill 2022 (budget 2022-23):
1. The Central Government has undertaken a number of measures to make the processes under the Act, electronic, by eliminating person to person interface between the taxpayer and the Department to the extent technologically feasible, and provide for optimal utilisation of resources and a team-based assessment with dynamic jurisdiction. A series of futuristic reforms have been introduced in the domain of Direct Tax administration for the benefit of taxpayers and economy. This started with faceless assessment in electronic mode involving no human interface between taxpayers and tax officials. The faceless procedures are being introduced in a phased manner in the Act.
2. As part of this process of making the tax administration transparent and efficient, provisions for notifying faceless schemes under sections 92CA, 144C, 253 and 264A were introduced in the Act through Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 with effect from 01.11.2020 and under section 255, was inserted through Finance Act, 2021 with effect from 01.04.2021:
|S. No.||Section||Scheme||Date of Limitation|
|1||92CA||Faceless determination of|
arm’s length price
|31 March, 2022|
|2||144C||Faceless Dispute Resolution Panel||31 March, 2022|
|3||253||Faceless appeal to Appellate Tribunal||31 March, 2022|
|4||255||Faceless procedure of Appellate Tribunal||31 March, 2023|
3. Section 92CA and section 144C are principally related to the transfer pricing functions and international taxation which are presently out of the regime of faceless assessment. New schemes for these two functions are a part of the assessment function and should follow the faceless assessment procedure, wherein certain modifications are proposed which will have an impact on the information technology structure. Therefore, notification at this time shall result in delay in stabilization of the systems.
4. As for notification of scheme under section 255, the Appellate Tribunal is deemed to be a civil court for all the purposes of section 195 of the Act and Chapter XXXV of the Code of Criminal Procedure, 1898. Therefore, a scheme governing the procedures to be followed by such a body needs to be formulated after due consultations with Ministry of Law & Justice. Similarly, the scheme under section 253 have to follow the scheme under section 255.
5. In light of the above limitations it is proposed to extend the date for issuing directions for the purposes of these sections 92CA, 144C, 253 and 255 till 31st March, 2024.
6. These amendments will take effect from 1st April, 2022.