Legal Framework of Faceless Assessments & Appeals

Khush Trivedi | Last updated: 26 June 2025

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Quick Summary

The legal framework for faceless assessments and appeals under the Income Tax Act, 1961, streamlines the process through the National Faceless Assessment Centre (NFAC). This system involves specialised units like Assessment, Verification, Technical, and Review Units to handle cases electronically. The procedure covers case assignment, notice issuance, information gathering, draft order preparation, opportunity for hearing, and finalisation of assessment or appeal orders, all communicated digitally.

Click Here To Know Introduction on Faceless Assessments Appeals Section 144B of Income Tax Act, 1961 Applicability Covers: Assessments under Sec 143(3) (scrutiny) Best-judgment assessments under Sec 144 Re-assessments under Sec 147 (subject to CBDT notification) Structural Framework F

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FAQ :

The NFAC acts as the central coordinating hub for faceless assessments, managing all communication with assessees and among the various functional units, and using automated systems for case allocation.

The process involves the Assessment Unit (AU) for examining returns and preparing draft orders, the Verification Unit (VU) for conducting inquiries, the Technical Unit (TU) for expert input, and the Review Unit (RU) for reviewing draft orders before finalisation.

All communication, including notices and orders, is conducted exclusively via electronic modes, such as a registered account on the portal, registered email, or the Income-tax Mobile App, with real-time alerts.

A video conference hearing can be requested by the assessee for oral submissions, particularly when responding to a Show Cause Notice, and is allowed based on approval and technological feasibility.

An assessee files an appeal online through Form 35 to the NFAC, which is then allocated to an Appeal Unit. The Assessing Officer provides a report, and further inquiries or hearings may be conducted before a draft appeal order is prepared and finalised.

The Assessment Unit (AU) is responsible for drafting the assessment order, which is then reviewed and finalised. For appeals, the Appeal Unit finalises the draft appeal order, and the NFAC issues the final order to both the assessee and the jurisdictional Assessing Officer.