Faceless Income-tax Appellate Tribunal (ITAT)

In News: The Finance Bill, 2021, proposes to make the Income Tax Appellate Tribunal (ITAT) faceless.

Faceless Dispute Resolution

For reducing litigation and to give an impetus to the dispute resolution for small taxpayers, a Dispute Resolution Committee is proposed to be constituted.The procedure of the Committee will be conducted in a faceless manner.
In order to provide a transparent tax appellate mechanism, it is proposed to make the Income Tax Appellate Tribunal faceless and jurisdiction-less.
A National Faceless Income Tax Appellate Tribunal Centre shall be established, wherein all communication between Tribunal and appellant shall be made electronically.
The faceless assessment system was launched to remove the need of the physical presence of the taxpayers in front of the tax officials.
Since the launch of faceless random assessment, over 50,000 disputes have been settled.
Income Tax appeals will be finalised in a faceless manner with the exception of appeals related to serious fraud, major tax evasion, search matters, international tax issues and matters pertaining to black money.
The effort is on to establish a National Faceless Income Tax Appellate Tribunal Centre that will offer personal hearings through video-conferencing.

Faceless tax scheme

In the Union Budget 2019, the Finance Minister proposed the introduction of a scheme of faceless e-assessment.

It is an attempt to remove individual tax officials’ discretion and potential harassment for income tax payers.
The scheme allows for appropriate cases where a certain hearing is necessary, so then after following protocols, a hearing is given.
The main objective is to remove physical interaction as much as possible.
The Central Government introduced the Faceless Assessment Scheme to provide greater transparency, efficiency and accountability in Income Tax assessments.
It is an attempt to remove individual tax officials’ discretion and potential harassment for income taxpayers.
All provisions introduced under Faceless Assessment, under the Income Tax Act, 1961, are introduced to-
Eliminate the interface between the Assessing Officer and the assesses during the course of proceedings, to the extent that is technologically feasible
Optimize the utilization of resources through the economies of scale and functional specialization and
Introduce a team-based determination of arm’s length price with dynamic jurisdiction.