Faceless Assessment Scheme — How to Respond to a Faceless Notice

The Faceless Assessment Scheme under Section 144B is designed to conduct income-tax assessments electronically without requiring a taxpayer to physically meet the Assessing Officer. Cases are allocated through an automated system and communication takes place electronically through the Income Tax e-Filing portal.

Receiving a faceless notice does not automatically mean that additional tax is payable. The taxpayer should carefully understand the notice and provide a complete, factual and properly documented response within the specified time.

1. Check the Notice Carefully

First, log in to the Income Tax e-Filing portal and go to:

Pending Actions → e-Proceedings

The portal allows taxpayers to view notices and submit responses electronically. Notices under Sections 143(2), 142(1), 148 and certain other proceedings can be handled through e-Proceedings.

Check:

• Assessment Year
• DIN/Notice number
• Section under which notice is issued
• Date of notice
• Response due date
• Issues/questions raised
• Documents specifically requested

Download and preserve the complete notice.

2. Understand What the Department Is Asking

A notice under Section 143(2) generally initiates scrutiny, while a subsequent Section 142(1) notice may contain detailed questions and requests for documents.

For example, the department may ask about:

• Bank deposits
• Property transactions
• Capital gains
• Business turnover
• Foreign income
• Loans and unsecured credits
• Large deductions
• TDS mismatches
• AIS/Form 26AS differences

Do not provide a generic response when a specific query has been raised.

3. Reconcile the ITR Before Replying

Before submitting your response, compare the information reported in the ITR with:

• Form 26AS
• AIS/TIS
• Bank statements
• Books of accounts
• TDS certificates
• Investment statements
• Property documents
• Loan confirmations
• Invoices and ledgers

If there is a mismatch, determine the reason before preparing the response.

4. Prepare an Issue-Wise Reply

A strong response should address each question separately.

For example:

Query: Explain the source of ₹10 lakh credited to the bank account.

Reply: Explain the transaction, date, source and tax treatment.

Evidence: Attach the relevant bank statement, invoice/agreement, ledger and other supporting documents.

This makes the submission easier for the Assessment Unit to verify.

5. Upload the Response Through e-Proceedings

The official faceless assessment procedure provides for electronic submission of responses through the e-Filing portal.

Broadly:

1. Login to the Income Tax e-Filing portal.
2. Go to Pending Actions.
3. Select e-Proceedings.
4. Open the relevant assessment proceeding.
5. Select the applicable notice.
6. Read/download the notice.
7. Click Submit Response.
8. Enter the explanation.
9. Upload supporting documents.
10. Select the appropriate response type.
11. Submit the response.
12. Save the acknowledgement.

If responding in multiple stages, the official guidance provides for Partial Response and, after the final submission, Full Response.

6. Need More Time? Request Adjournment

If the requested information cannot reasonably be collected before the deadline, an adjournment can be requested through the e-Proceedings facility, with the reason for seeking additional time.

However, an extension should not be assumed to be automatically granted. Continue to monitor the portal.

7. Request Personal Hearing Where Applicable

Faceless assessment does not necessarily mean that a taxpayer has no opportunity for a personal hearing. Where the statutory conditions for a hearing are met and the taxpayer makes the required request, the hearing process can be conducted electronically.

Therefore, if an adverse variation is proposed and a hearing is legally available, the taxpayer should consider making a specific request for personal hearing rather than simply submitting documents.

Common Mistakes to Avoid

❌ Ignoring the notice because the assessment is “faceless”

❌ Missing the response deadline

❌ Giving incomplete answers

❌ Uploading documents without explaining their relevance

❌ Providing figures inconsistent with the ITR or books

❌ Ignoring AIS/26AS mismatches

❌ Submitting irrelevant documents

❌ Failing to preserve acknowledgement of submissions

Final Checklist

Before submitting your response, verify:

• ✔ Correct Assessment Year
• ✔ Correct notice and DIN
• ✔ Every query answered
• ✔ Figures reconciled with ITR
• ✔ Supporting documents attached
• ✔ Explanation is factual and issue-wise
• ✔ Response submitted before the deadline
• ✔ Acknowledgement saved

Conclusion

The Faceless Assessment Scheme under Section 144B makes the assessment process primarily electronic, but taxpayers still need to actively participate in the proceedings. The most important approach is to read the notice carefully, reconcile the ITR, answer every query separately, provide documentary evidence and submit the response within the prescribed time.

For complicated matters involving foreign income, unexplained bank credits, property transactions, business turnover, capital gains or substantial proposed additions, the response should be reviewed by a qualified tax professional before submission.