Section 165A of Income Tax Act: Understanding the Faceless Appeal Scheme

March 20, 2023

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Section 165A of the Income Tax Act: An Overview

Section 165A of the Income Tax Act was introduced in the Finance Act of 2021 and came into effect from April 1, 2021. This section provides for the Faceless Appeal Scheme, which aims to make the appeal process more efficient, transparent, and objective. In this blog, we will discuss the salient features of Section 165A and how it impacts taxpayers.

Faceless Appeal Scheme: Objectives

The Faceless Appeal Scheme aims to reduce the physical interface between the taxpayer and the tax authorities, ensuring greater transparency and objectivity in the appeal process. The key objectives of this scheme are:

To eliminate the human interface between taxpayers and tax authorities, reducing the chances of corruption and malpractices.
To make the appeal process more efficient and less time-consuming.
To ensure uniformity and consistency in the appellate orders.
To provide taxpayers with a hassle-free appeal process, without the need for physical visits to tax authorities.

Faceless Appeal Scheme: Key Features

The Faceless Appeal Scheme has several key features that make it an efficient and transparent appeal process. Some of these features are:

Faceless Appeal Centre: The Faceless Appeal Scheme is operated through a Faceless Appeal Centre, which is responsible for the conduct of the appeal proceedings. The Centre is located in a centralized location and is responsible for allocating the appeal cases to the respective appellate authorities.
Allocation of cases: The allocation of cases is done randomly by the Faceless Appeal Centre, ensuring that the appeal proceedings are objective and unbiased.
Appeal proceedings: All appeal proceedings are conducted electronically, and the taxpayers are not required to visit the tax authorities in person. The taxpayers can make their submissions online, and the appellate authorities will make their orders electronically.
Quicker resolution: The Faceless Appeal Scheme aims to resolve appeals in a time-bound manner. The appeals are required to be disposed of within a period of one year from the end of the financial year in which the appeal was filed.
Appeal orders: The appeal orders are made by the appellate authorities without disclosing their identity. The appellate authorities are required to make their orders based on the merits of the case and the applicable laws, ensuring greater transparency and objectivity.

Impact of Faceless Appeal Scheme on Taxpayers

The Faceless Appeal Scheme has several benefits for taxpayers. Some of these benefits are:

Hassle-free appeal process: Taxpayers are not required to visit the tax authorities in person, making the appeal process hassle-free and less time-consuming.
Uniformity and consistency: The appeal orders are made by the appellate authorities without disclosing their identity, ensuring uniformity and consistency in the orders.
Transparency and objectivity: The Faceless Appeal Scheme ensures greater transparency and objectivity in the appeal process, reducing the chances of corruption and malpractices.
Faster resolution: The Faceless Appeal Scheme aims to resolve appeals in a time-bound manner, ensuring that the taxpayers get a quicker resolution to their appeal.

The introduction of the Faceless Appeal Scheme under Section 165A of the Income Tax Act has been a significant development in India’s tax administration. This scheme has brought about a paradigm shift in the way appeal proceedings are conducted, making them more efficient, transparent, and objective.

One of the key benefits of the Faceless Appeal Scheme is that it reduces the physical interface between the taxpayers and the tax authorities, which has been a major cause of concern in the past. The human interface often led to corruption and malpractices, which affected the taxpayers’ interests. With the Faceless Appeal Scheme, the appeal process is conducted electronically, reducing the chances of corruption and malpractices.

The Faceless Appeal Scheme has also ensured uniformity and consistency in the appellate orders, which was a significant issue in the past. The appellate authorities are required to make their orders based on the merits of the case and the applicable laws, ensuring greater transparency and objectivity. The appellate orders are made without disclosing the identity of the appellate authorities, ensuring uniformity and consistency in the orders.

The Faceless Appeal Scheme also ensures faster resolution of appeals, which is a significant benefit for taxpayers. The appeals are required to be disposed of within a period of one year from the end of the financial year in which the appeal was filed. This ensures that taxpayers get a quicker resolution to their appeal, which is critical to their business operations.

Moreover, the Faceless Appeal Scheme has made the appeal process hassle-free and less time-consuming for taxpayers. They are not required to visit the tax authorities in person, making the appeal process more convenient and accessible for them. The appeal proceedings are conducted electronically, which saves time and effort for taxpayers.

Conclusion

In conclusion, Section 165A of the Income Tax Act and the Faceless Appeal Scheme have been a significant development in India’s tax administration. The scheme has brought about a paradigm shift in the way appeal proceedings are conducted, making them more efficient, transparent, and objective. The scheme has several benefits for taxpayers, such as hassle-free appeal process, uniformity and consistency, transparency and objectivity, and faster resolution. The scheme has ensured that taxpayers get a fair and impartial appeal process, which is critical to their business operations.

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Frequently Asked Questions (FAQs)

What is Section 165A of the Income Tax Act?
Section 165A of the Income Tax Act provides for the Faceless Appeal Scheme, which aims to make the appeal process more efficient, transparent, and objective.

When did the Faceless Appeal Scheme come into effect?
The Faceless Appeal Scheme came into effect from April 1, 2021.

What are the key objectives of the Faceless Appeal Scheme?
The key objectives of the Faceless Appeal Scheme are to eliminate the human interface between taxpayers and tax authorities, make the appeal process more efficient and less time-consuming, ensure uniformity and consistency in the appellate orders, and provide taxpayers with a hassle-free appeal process.

What is the Faceless Appeal Centre?
The Faceless Appeal Centre is responsible for the conduct of the appeal proceedings. The Centre is located in a centralized location and is responsible for allocating the appeal cases to the respective appellate authorities.

How are the cases allocated under the Faceless Appeal Scheme?
The allocation of cases is done randomly by the Faceless Appeal Centre, ensuring that the appeal proceedings are objective and unbiased.

How are the appeal proceedings conducted under the Faceless Appeal Scheme?
All appeal proceedings are conducted electronically, and the taxpayers are not required to visit the tax authorities in person. The taxpayers can make their submissions online, and the appellate authorities will make their orders electronically.

How long does it take to dispose of appeals under the Faceless Appeal Scheme?
The appeals are required to be disposed of within a period of one year from the end of the financial year in which the appeal was filed.

Are the appellate authorities required to disclose their identity while making the appeal orders?
No, the appellate authorities are required to make their orders without disclosing their identity, ensuring uniformity and consistency in the orders.

What are the benefits of the Faceless Appeal Scheme for taxpayers?
The benefits of the Faceless Appeal Scheme for taxpayers include hassle-free appeal process, uniformity and consistency, transparency and objectivity, and faster resolution.

How can taxpayers access the Faceless Appeal Scheme?
Taxpayers can access the Faceless Appeal Scheme through the Income Tax Department’s e-filing portal. They can file their appeal applications online and track the status of their appeals through the portal.