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Fiscal Developments 79

taxable income of upto Rs 50 lakhs and any disputed income of Rs 10 lakhs can approach
this committee. It will prevent new disputes and settle the issue at the initial stage.

Faceless procedures to promote transparency

¾ The Faceless Assessment Scheme was launched in 2020 which abolishes the earlier
system of tax administration and assessment based on territorial jurisdiction. It provides
for assessment by randomly chosen virtual teams with dynamic jurisdiction. More than
two lakh cases have been allocated out of which 1.99 lacs have been completed without
any interaction with the taxpayer. So far around 11.20 lac notices have been issued in a
faceless manner out of which responses have been received in more than 6.93 lac cases (as
on 16.11.2021).

¾ Faceless Appeals Scheme has also been launched which allows taxpayers to file their
documents in an electronic mode and saves them the hassle of visiting the Income Tax
Department. About 88 per cent of the appeals are handled under the Faceless Appeals
mechanism. To ease compliance, it has been clarified that e-verification and digital
signature is not needed if documents are filed through e-filing account in faceless assessment
proceedings.

¾ Faceless Penalty scheme 2021 was also launched to impart greater efficiency, transparency
and accountability to the procedure for imposition of penalty. The Scheme makes it possible
for taxpayers to submit replies and participate in the proceedings at their convenience. It
also provides for peer review of orders which will result in orders that are qualitatively
better, reasonable and fair.

¾ The Finance Act 2021 has also empowered the Central Government to notify a scheme
for disposal of appeals by the Income Tax Appellate Tribunal (ITAT) to impart greater
efficiency, transparency and accountability by eliminating the interface between the
Appellate Tribunal and parties to the appeal in the course of appellate proceedings to the
extent technologically feasible, optimizing utilization of resources through economies
of scale and functional specialization and introducing an appellate system with dynamic
jurisdiction. All communication between the Tribunal and the appellant shall be electronic.
In case where personal hearing is needed, it shall be done through video-conferencing.

Reduction in compliance requirement

¾ A comprehensive study of the Income Tax Act and rules had been undertaken to identify
those compliance which can be reduced. Out of total 271 compliances which belong to
Income-tax Act, 74 compliances have already been reduced. However, out of the remaining
197 compliances, 152 are already online and 45 are offline. Out of these 45 offline
compliances, 42 compliances will be made online. 3 compliances will need to be manual
due to non-availability of PAN in certain cases. Further efforts are continuously being made
to provide online facilities to the taxpayers for ease of compliance. In 2021, a utility was
released where taxpayers can check in quick time from PAN of their clients, if the client has
filed return of income and therefore no extra tax to be deducted.