Faceless Appeals Scheme, 2021 – Whether a Game-changer or not?

Introduction

“Now, the tax system is turning faceless, but it promises fairness and fearlessness to the taxpayer. This will end the era of ‘jaan pehchan’ in getting tax scrutiny and notices settled” With these words of Prime Minister, Narendra Modi was introduced the Faceless Appeal Scheme in August, 2020.

However, the announcement of required change in the legislature which would allow to introduce such faceless scheme was brought into by Finance, act 2020. In the budget speech delivered by the Finance Minister, Mrs. Nirmala Sitharaman in 2020, reference was made to the proposal of enabling the conduct of appeal hearings in a faceless manner on similar lines as the faceless assessment. The relevant extract from the budget speech is reproduced below:

“Our government is committed to bringing in transformational changes so that maximum governance is provided with minimum government. In order to impart greater efficiency, transparency and accountability to the assessment process, a new faceless assessment scheme has already been introduced. Currently, most of the functions of the Income Tax Department starting from the filing of return, processing of returns, issuance of refunds and assessment are performed in the electronic mode without any human interface. In order to take the reforms initiated by the Department to the next level and to eliminate human interface, I propose to amend the Income Tax Act so as to enable Faceless appeal on the lines of Faceless assessment”.

Sub sections 6B, 6C and 6D are introduced by the Finance Bill, 2020. The Finance Bill, 2020 got assent from the President on 27th March 2020 and the proposed amendment in section 250 of the Act came to be made effective from 1st of April 2020. The same are reproduced as under:

“(6A) In every appeal, the Commissioner (Appeals), where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him under sub-section (1) of section 246A.

(6B) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of disposal of appeal by Commissioner (Appeals), so as to impart greater efficiency, transparency and accountability by—

eliminating the interface between the Commissioner (Appeals) and the appellant in the course of appellate proceedings to the extent technologically feasible;
optimising utilisation of the resources through economies of scale and functional specialisation;
introducing an appellate system with dynamic jurisdiction in which appeal shall be disposed of by one or more Commissioner (Appeals).

(6C) The Central Government may, for the purposes of giving effect to the scheme made under sub-section (6B), by notification in the Official Gazette, direct that any of the provisions of this Act relating to jurisdiction and procedure for disposal of appeals by Commissioner (Appeals) shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:

Provided that no direction shall be issued after the 31st day of March, 2022.

(6D) Every notification issued under sub-section (6B) and sub-section (6C) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.”

The Hon’ble Prime Minister on August 13, 2020 launched the platform for Honouring the Honest where he announced three schemes to enable their mission, namely Faceless Assessment, Faceless Appeals and Tax Payer’s Charter. Under the powers given in section 250 (6B), National Faceless Appeal Scheme was introduced on 25-09-2020.

Following three notifications issued on 25th September, 2020 laid the foundation to faceless appeals:

Notification No. 77 empowered under section 250(6C) of the Act, the Central Government has issued directions that the provisions of sections 2(16A), 120, 129, 131, 133, 134, 136 and Chapter XX of the Act shall apply to the procedure in appeal per the scheme subject to the exceptions, modifications and adoptions as specified in the notification.
Notification No. 80 issued under sections 120(1) and 120(2) of the Act specified that authorities of the National Faceless Appeal Centre shall have their headquarters at Delhi. It also specified that who shall exercise the powers and perform functions to facilitate the conduct of Faceless Appeal Proceedings in respect of cases specified by the Board.
Notification No. 81 issued under sections 120(1) and 120(2) of the Act whereby Income-tax authorities of the Regional Faceless Appeal Centre have been specified. RFAC shall exercise the powers and perform functions to facilitate the conduct of Faceless Appeal proceedings in respect of cases specified by the Board.

Faceless Appeals are indeed a revolutionary and path-breaking initiative of the Government. It aims at reforming and overhauling the tax administration system by curbing the undesirable practices prevailing in the system and by eliminating the personal interface between the assessee and the appellate authority.

Though, there are lot of merits to this scheme, there were several legal lacunas to the scheme as well and therefore it was challenged for its constitutional validity at various courts. Focus of this article shall be to point out several challenges in the functioning of the new system and some suggestions with which we can make it more effective and sustainable for a longer run.

Before we discuss the legal parameters, let us have a glance at the salient features of the faceless scheme which was introduced in 2020.

Salient features of Faceless Appeal Scheme, 2020 (hereinafter referred as FAS, 2020)

The faceless scheme applies with effect from 25th September, 2020 and all pending appeals as on that date with immediate effect.
The exceptions of the scheme as per the press release dated 25-09-2020 are appeals relating to serious frauds, major tax evasion appeals, sensitive & search matters, international taxation matters and Black money Act matters.
The scheme totally works with no physical human interaction. The only hearing which the appellant gets is through video conference facility. All other communications to be catered electronically only through income tax portal of the assessee.
National Faceless Appeal Centre (NFAC), Regional Faceless Appeal Centre (RFAC), and Appeal Units (AU) are the three main functioning units of this scheme. NFAC shall be the only communication link between the assessee and the authorities. AU shall be the main functioning body which shall call for information, read the submissions made by assessee and make draft orders based on the given information.
The major change in this scheme as compared to the erstwhile procedures done physically is the mandate to pass a draft appeal order. The same if challenged shall be allotted to some other appeal unit to consider the objections of assessee and the latter AU shall then pass review draft order and send it across to NFAC.
If the appellant wants an oral hearing through video conference facility, the request can be put up before the authorities. However, it shall be at the discretion of the Chief Commissioner or the Director General of RFAC to approve the request or not.

The Legal Battle

The most debatable legal issues under the faceless appeal scheme was discretion given to the revenue authorities to decide whether a hearing by way of video conference should be given or not to the assessee. This ignited into various writ petitions filed across many states challenging the provisions of the scheme. One of the matters is pending before the Apex Court in this regard in case of CBDT v. Lakshya Budhiraja & Anr etc. The hearing though still has to reach conclusion but the Hon’ble Apex Court did pass an interim direction asking CBDT to clarify the government stand to make changes in Faceless Appeal Scheme. With the new scheme announced on 28-12-2021, the Apex Court vide their order dated 10-01-2022, have held that all the transfer petitions made by various High Courts to the Apex Court have now become infructuous and therefore the said petitions are disposed of. With that effect all transfers which were sought to be made by Bombay, Allahabad, Delhi & Telangana & Kerala High Courts stands dismissed and these High Courts shall have to deal with the matters independently.

A Public Interest Litigation (PIL) is also filed by Chamber of Tax Consultants before the Bombay High Court and the matter is also stayed based on directions to be issued by the Apex Court in a similar matter. Interestingly, in a hearing before the Hon’ble court on 04-12-2021, the Additional Solicitor General Anil Singh put up a fact that around 56100 appeals are already disposed of under the faceless appeal schemes and out of those only one of the applicants had sought a personal hearing (though these numbers were challenged by the Advocate for petitioner counter arguing that all matters for hearing are stayed because of the pending decision of Apex Court). The matter before Bombay High court is stayed as of now till further hearing. There are various other issues taken up in the PIL apart from personal hearing which seems to be not addressed in the revised scheme. For those open-ended issues, one shall have to wait and watch the outcome of the PIL before the Hon’ble Bombay High Court.

Some Practical Hindrances in the functioning

Silence about the remand report- The FAS,2020 has a provision for asking details from the NaFAC or AO on any of the matters and requires it to submit such a report. The FAS, 2020 however, mentions that such report so received shall be forwarded by NFAC to the appeal unit. The scheme is silent on whether such reports shall be given to the appellant or not. Under the erstwhile physical hearing of appeals, a copy of the remand report as made by the AO, was always furnished to the appellant for their submissions or objections on the same. This was a fair practice, as no material or submission received can be taken into consideration without giving opportunity to parties to the appeal.
Application for additional evidence- As per the FAS, if any additional evidence is to be submitted by the appellant, the same shall be submitted to the NFAC and the same shall be forwarded to the NaFAC for their comments on the admissibility of such additional evidence. After receiving such comments, the appeal unit shall decide whether such evidence is to be accepted or rejected. Now, ideally only if the additional evidence is admitted, the appellant can form it part of submissions and place reliance for it. So, the ideal procedure shall be to first make an application for additional evidence along with those documents on which reliance is placed and wait for a response from NFAC to admit or reject it for a further course of action. However, the scheme is silent as to in how much time this process shall be over and that brings the uncertainty.

Further, practically there have been cases where the appellant has submitted the additional evidence application along with submissions and there has been no response by the NFAC on the additional evidence acceptance or rejection. Rather, the NFAC has asked for some more details to proceed with the matter. So, in such a scenario one certainly wonders, that the procedure is really in place currently or is just applicable in theory. The FAS should have brought the time limit to remove this hindrance and accelerate the proceedings. Now, under the faceless appeals, this shall create more uncertainty as there is no procedure to even follow up with the CIT(A) or their staff, unlike the physical proceedings.
Revised grounds of appeal- Generally, under the physical proceedings, the CIT(A) used to accept the revised grounds of appeal. The FAS does not speak anything about the revised grounds at all. So, if the appellant after filing grounds of appeal realizes some error or mistake, there seem to be no provisions under the FAS to rectify the same. Although it seems that revised grounds application can be made with the submissions itself. The appellant has to be very careful while drafting the grounds of appeal keeping in mind that the possibility of revising grounds is minimised.
No format of additional evidence or additional ground is specified or made available as contemplated in the scheme: The FAS states that the appellant shall be allowed to submit additional grounds of appeal and application for additional evidence in the specified form. To date there is no specified form that has been prescribed under the FAS.
Request for condonation of delay: The FAS specifies that if the appeal is time-barred, the appeal unit may accept the condonation, if it is satisfied that the appellant had sufficient cause of not filing the appeal within time limits. In a physical era, if there was a delay in appeal filing, the appellant was required to file a condonation application to condone the delay along with an affidavit mentioning the reasons thereof. This application normally is considered in the first hearing. The FAS is silent about such application or affidavit requirements. Also, if the appeal is not accepted, there is no provision about granting the appellant an opportunity on representing as to why the condonation should be granted and why the appeal should be admitted. Form 35 also demands reasons for the delay in filing of the appeal, so one should be careful to provide elaborate and genuine reasons for delay while at filing stage itself.
No provision to withdraw the appeal: There is no provision under the scheme whatsoever, as to how the appellant can make an application for withdrawal of the appeal. Ideally, the appeal should be withdrawn only under exceptional circumstances and at the discretion of the CIT(A). However, now that there is no personal interaction with CIT(A), the FAS ought to be clear as to the procedure for withdrawal of appeals. In absence of any provision, the appellant may be advised to make an application for withdrawal with reasons when notice of hearing is received and at the same time to not respond to any further notices by way of submissions or facts as that would be deemed to be the intent to proceed with the appeal. As per our recent experience we have filed withdrawal request in the first hearing notice, and the same has been accepted by way of a speaking order.
No provision to apply for stay proceedings: Once the demand is raised under section 156 and issued along with the assessment order, the assessee has an option to apply for stay of demand by making an application to CIT(A) or PCIT. The CIT(A) and PCIT have equal powers to stay the demand for sufficient reasons. the scheme has not envisaged the provisions pertaining to a stay of demand.
No provision to may an early hearing application: The Commissioner (Appeals) has the inherent power to give an early hearing due to the urgency of the matter. In an appropriate case, the appellant can make an application for an early hearing of the appeal. In case the application is rejected or not responded the appellant can approach the High Court by filing Writ Petition.

The Scheme has not laid down any procedure for an appellant to apply for an early hearing. The appellant can respond only if there is a submission tab available on the portal. Such a response tab gets activated only when the hearing notice is issued.
No time limits between processes and also for passing order of CIT(A): There are procedures set out for rectification of appeal order, for issuance of the draft order, for review of draft order etc. These procedures involve various units and even NaFAC at some of the instances. However, strangely the FAS is silent on the time limits of such authorities or units to revert back to NFAC with whatever is assigned to it. If the stringent deadlines are not agreed to especially when multiple parties are involved in concluding one appeal, it may delay the procedure significantly and not achieve the end purposes of faceless procedures of bringing about quicker process time. No time limit has been specified for admission or rejection of appeal filed by the assessee thereby hampering the achievement of the objective of “greater efficiency”!
Right to Cross-examine before the NFAC: The scheme enables the NaFAC or Assessing Officer to claim cross-examination of witnesses, however, no such provision is made whereby the appellant can ask for cross-examination where the Assessing Officer relies on a statement of a third party. Though not specifically provided in the scheme, one needs to know that right to cross-examine is inherent to the constitutional rights of any assessee and the same can be exercised even if the same is not provided for. There may be situations when AO relies on some third-party statements in and no opportunity was given during the assessment process. The powers of CIT(A) being co-terminus to powers of AO, suitable provisions should be made to empower FAS so as to allow the assessee to cross examine at appellate stage too.

Salient features of Faceless Appeal Scheme, 2021 (hereinafter referred as FAS, 2021)

With the advent of increasing litigation on the validity of the FAS, 2020 and the growing issues as discussed above, the Faceless Appeal Scheme, 2021 (hereinafter referred to as FAS, 2021) was released vide notification dated 28th December, 2021. This Act shall supersede the earlier FAS, 2020.

There have been some significant changes in the Faceless Appeal Scheme, 2021, the most important ones are enumerated as under:

The opportunity to hear appellant through video conference facility is not left at the discretion of Chief Commissioner or Director General. This was one of the major point of litigations once the earlier scheme was announced and was also one of the main grounds in all the writ petitions filed which challenged the constitutional validity of the scheme on the principle of natural justice.
The concept of draft order and review of draft order has been removed from the new scheme. This has also been rightly brough about as having a review of an appellate order made by one CIT(A) from another CIT(A) was demeaning the authority itself.
Every appeal unit shall now have only one CIT(A) as against one or more in earlier schemes. This is also a welcome step as there is no requirement to have two appellate authorities for one single matter.
The direct interaction of CIT(A) with the AO shall enable simplified and speedier processes.
By removing the Regional Faceless Appeal Centre and by removal of need Review Unit, a lot of layers in the erstwhile scheme are removed and therefore it shall simply procedures.
The notification F No. 279Misc./M-102/2021_ITJ dated 29-12-2021followed by the new scheme, has set out guidelines for priority or out of turn disposal of urgent matters. In genuine and exceptional circumstances, the jurisdictional Pr.CIT may allow to entertain an early hearing in following cases:
1. Cases having demand above 1 crore;
2. Cases where refunds as claimed in income tax return are in excess of Rs.100,000/-
3. Cases where directions to this effect are issued by courts;
4. Cases where request made by Senior Citizens and super senior citizens.
5. Any other case of genuine hardship.

Below is a snapshot of comparison between both the schemes:

Faceless Appeal Scheme, 2020	Faceless Appeal Scheme, 2021
Effective date: from 25-09-2020 to 27-12-2021	Effective date- from 28-12-2021 and onwards
Automated examination tool meant an algorithm for standardised examination of draft orders, by using suitable technological tools, including artificial intelligence and machine learning, with a view to reduce the scope of discretion.	This definition has been removed from the new scheme. However, the automated allocation system still is part of the scheme.
“originator” shall have the same meaning as assigned to it in clause (za) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);	The definition of originator has been removed from the FAS, 2021, reasons not known why the same is deleted.
National Faceless Appeal Centre to facilitate the conduct of e-appeal proceedings in a centralised manner, which shall be vested with the jurisdiction to dispose appeal in accordance with the provisions of this Scheme	a National Faceless Appeal Centre to facilitate the conduct of e-appeal proceedings in a centralised manner. (the jurisdiction part is removed correctly as Faceless Appeals cannot have NFAC as jurisdiction to dispose considering the fact that disposal happens by the Appeal Unit)
Regional Faceless Appeal Centres as it may deem necessary to facilitate the conduct of e-appeal proceedings, which shall be vested with the jurisdiction to dispose appeal in accordance with the provisions of this Scheme	The concept of Regional Faceless Appeal Centre is removed from the FAS, 2021. This is a welcome move, as there was no requirement to have an another layer of authority above the Appeal Units.
Appeal units, as it may deem necessary to facilitate the conduct of e-appeal proceedings, to perform the function of disposing appeal, which includes admitting additional grounds of appeal, making such further inquiry as thinks fit, directing the National e-Assessment Centre or the Assessing Officer, as the case may be, for making further inquiry, seeking information or clarification on admitted grounds of appeal, providing opportunity of being heard to the appellant, analysis of the material furnished by the appellant, review of draft order, and such other functions as may be required for the purposes of this Scheme	Appeal units, as it may deem necessary to facilitate the conduct of e-appeal proceedings by the Commissioner (Appeals). The functions of appeal units are made more generic by the new scheme and that makes it wide to interpretation.
The appeal unit shall include one or more Commissioner (Appeals) and such income tax authority, ministerial staff, executive or consultant to assist the Commissioner (Appeals) as considered necessary by the Board.	The appeal unit shall include one Commissioner (Appeals), and such other income-tax authority, ministerial staff, executive or consultant to assist the Commissioner (Appeals) as considered necessary by the Board. The appeal unit shall now comprise only of one CIT(A) as compared to earlier provisions. This makes sense now, as for appellate function two appeal authorities are not required.
NFAC shall allocate appeals to AU within any RFAC based on automated allocation system.	The NFAC shall directly allocate appeals to CIT(A) in the AU based on automated allocation system.
In case of appeal filed after expiration, the AU if satisfied that the cause is sufficient for not filing the appeal, then shall admit otherwise shall reject the appeal.	May condone the delay in filing appeal if the appeal is filed beyond the time permitted under section 249 of the Act and record the reasons for such condonation or otherwise in the appeal order passed.
All interaction between the appeal units and the appellants and between the appeal units and the Assessing Officer shall be only through NFAC.	CIT(A) shall call for information from the assessee by sending notice through NFAC and shall also send a copy of notice to AO directly or through NFAC. One striking change in the language of functions of CIT(A) is that the words ‘shall’ have been replaced by ‘may’, making the provisions little liberal. Also, whenever there is an interaction with AO the CIT(A) is allowed to directly communicate. However, with assessee CIT(A) has to do it only through NFAC.
Remand report shall be assigned and obtained by	Remand report shall be obtained from AO directly or through NFAC whenever additional evidences are submitted by the assessee.
The appellant can file additional evidence on portal and it shall be send to the appeal units through NFAC.	The appellant is allowed to submit application for additional evidence to CIT(A) directly or through NFAC.
The Appeal unit shall make a draft order and send that across to NFAC who shall in turn send it to the appellant with a show cause notice as to why action should not be taken as per the draft order. There was also an option of review of draft order by another appeal unit if the assessee objects to the first draft order.	After obtaining all information from appellant and AO, the CIT(A) shall prepare appeal order in writing stating points of determination, the decision thereon, and reasons for decision, shall sign the order digitally to NFAC along with penalty proceedings if any to be initiated thereon.
	This is the most welcome step which has been made by FAS, 2021. The concept of draft order and review of draft order are done away with.
Prior approval from Board is required for transfer to CIT(A).	The appeal at any stage may be transferred to CIT(A) if considered necessary by an order u/s.120.
Authentication of electronic record through digital signature of NFAC	The authentication of electronic record shall sent by CIT(A) shall be through his own digital signature.
In this scheme, the delivery of any communication shall be to the registered account, registered email address or on mobile app and followed by real term alert. Sending a real time alert was mandatory irrespective the first mode of communication.	The delivery shall be either through placing copy on appellants registered account or to registered email address or uploading the copy on appellants Mobile App followed by real time alert. (that means now SMS shall be sent only if the communication is sent through mobile app)
The Chief Commissioner or the Director General, in charge of the Regional Faceless Appeal Centre, under which the concerned appeal unit is set up, may approve the request for personal hearing if he is of the opinion that the request is covered by the circumstances referred to in clause (xi) of paragraph 13 of the said Scheme.	The appellant 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 Commissioner (Appeals), through the National Faceless Appeal Centre, under this Scheme. The concerned Commissioner (Appeals) shall allow the request for personal hearing and communicate the date and time of hearing to the appellant through the National Faceless Appeal Centre.

Way forward and some suggestions to improve the effectiveness of the scheme

As can been seen many of the positive changes and amendments in the FAS, 2021 are based on the various grounds filed in writ petition before Supreme Court. However, there are still some suggestions which can make the scheme better over the period of time, some of those are listed as under:

The scheme mentions about specified formats for application of additional evidence and additional grounds. However, no such formats are till date specified. The same should be specified well in advance so that there is uniformity in procedures.
The authentication under FAS, 2021 is to be done through the digital signature of the CIT(A) who is passing the order. At various places the CIT(A) has been given a free hand to directly communicate with the AO and surpass the authority of NFAC. At one of the places where the assessee is required to make additional evidences, it is stated that the assessee can directly make application for additional evidences to CIT(A). When the CIT(A) is known to the assessee and the assessing officer directly or indirectly because of various relaxations brought about in the scheme, one really wonders whether is there any ‘faceless’ element remains in the scheme or not. The CIT(A) being faceless would be far from reality with introduction of the new scheme. Therefore, it would be nothing but e-appeals as against the faceless appeals.
Uploading of several written submissions with supporting is still a haunting task for assessee and authorised representatives. Though relatively, since the size of attachments have been increased to 10MB, things are better. However, that does not solve the issue of submissions of voluminous data at one time. The technology upgradation in the portal has to be up-to-date and allow the data and traffic on website.
Currently it has been seen that the notices issued for hearing gives considerably lesser time for appellant to make submissions. An average 5-7 days are only given to the appellants to make written submissions. Most of the times, the appellant receives the intimation of notice only late and therefore there are hardly any days left to make a response. Considering the fact that this is the first appellate authority and submission are generally more detailed in nature and that people are still getting used to the new systems, minimum 15 days time should be given for every notice of hearing issued.
If the functioning of scheme, totally depends upon the electronic medium, then it goes without saying the robust IT Infrastructure should be the first priority of government. The current systems in place are low grade and have lot of updation required thereto. Because the software providers have changed there has been a long-haul disruption in the data uploaded online. Sometimes the data uploaded by assessee cannot be seen altogether, sometimes the hearing notices appear as many 5 times on the portal. The old appeal records are still missing in several cases. All this toils up to cumbersome user experience and creates nothing but poor appellate process. It is high time that systems start working seamlessly thereby making the appeal procedures smooth.
Cyber threat is real and the most under rated threat as of now in faceless appeals. A lot of confidential data is being transmitted by assessee online to comply with the notices. The government needs to guarantee security of the data submitted online. Steps should be taken to secure such private and confidential data of assessee. It shall be the job of government and CBDT to assure the citizens that suitable measures are taken to protect their privacy. Any significant policy making decisions in this area can be successful only if it wins the trust of taxpayers.
The Faceless assessments have a detailed and exhaustive – standard operating procedures (SOPs) in place for each of the units involved and for uniform internal functioning of assessments. Similar SOPs should also be drafted for faceless appeals so that there is standardisation of appeal processes.
The cases which are set- aside by ITAT for fresh or limited consideration to the file of CIT(A), should be preferably excluded from faceless appeal schemes. The set aside cases should be continued with the same CIT(A) who had passed the original order, that shall make things better and the appellate be saved from ordeal of re-submitting and explanation of all details to some new CIT(A).
One of the major drawbacks that remains of the faceless appeal schemes, is how abruptly it came into effect. The scheme was made applicable from 25-09-2020 without any prior notice and was made applicable to all pending cases as on that date. This is unfair for the assessee and the appellate authorities who have already heard multiple hearings and concluded matters pending passing the order. The pending matters should be continued the physical ways. Faceless appeals should have been applied to the appeals which have been filed after 25-09-2020. Submitting all data again and explaining the matter afresh is waste of time, money and resources for the taxpayers and taxmen.
There is a requirement to bring suitable clarification of miscellaneous powers of CIT(A) like granting stay of demand or sanctioning prosecution etc. as to how these functions are to be performed by CIT(A) within an Appeal unit. The scheme is silent about it, and since there is no concept of Jurisdictional CIT(A) like we have for AOs, the clarification to these regards can bring clarity.
Faceless Appeal scheme does not envisage an incidence for ex-parte hearing and orders. A suitable clarification to the scheme may clarify the position.
The Scheme provides for the initiation of penalty for non-compliance of any notice, direction or order issued under the scheme, however there exists no such provision under the Income Tax Act 1961 empowering the CIT(A) to initiate such penalty proceedings.
When the faceless assessment and appeal schemes were introduced by the Prime Minister, at the same time Taxpayer’s Charter was also announced in the scheme of Honouring the Honest. It was hoped that with the Prime Minister’s announcement, the Taxpayer’s Charter shall see the light of the day and shall be enacted in law. Ironically, the faceless schemes did make it to the statute however, the Tax payer’s Charter did not get enacted. It is seen still under the proposal stage itself and therefore when it comes to protecting the rights of the assessee, the administrative functions are tad behind. There should be time limits set for disposal of appeals and also for submission of remand report by AO. The timebound procedures would enable speedy and effective disposals.

Conclusion

FAS,2021 undoubtedly is simplified and after considering the stakeholders. It will be the booster in reducing the overall timeframe for litigation and reduction in time gap, as a high percentage of the pending appeals is expected to be taken up in a faceless manner. The faceless appeals have been challenged in the Apex Court and various HCs for testing its constitutional validity. In the coming duration, we shall know more about the fate of faceless appeals and it would be interesting to see what is there in store for us. One thing seems certain here that faceless appeal scheme seems to stay. There may be tweaks, amendments, revisions, however a complete abolishing of scheme seems to be far-fetched. The FAS is at a nascent stage with several grey areas. To make FAS, a path-breaking and revolutionary initiative it is crucial to take suitable measures to overcome the bottlenecks and hurdles. If implemented effectively, it can be a game-changer in the entire tax administration system not only in India but worldwide. India could emerge as one of the first countries globally to make it’s appellate procedures completely digital with zero human interaction.