Notification No. 3/2021 [F. No. 370142/51/2020-TPL] / SO 118(E)

Last updated: 14 January 2021

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The Central Board of Direct Taxes has issued new directions for the Faceless Penalty Scheme, 2021. These directions outline the procedure for imposing penalties under the Income-tax Act, 1961, making the process more automated and faceless. Cases initiated for penalty will be referred to the National Faceless Penalty Centre, which will then assign them to specific penalty units for review and further action.

MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 12th January, 2021 INCOME-TAX S.O. 118(E).In exercise of the powers conferred by sub-section (2B) of section 274 of the Income-tax Act, 1961 (43 of 1961), for the purposes of giving effect

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FAQ :

This notification introduces directions to implement the Faceless Penalty Scheme, 2021, under the Income-tax Act, 1961.

If an income-tax authority or the National Faceless Assessment Centre initiates penalty proceedings and issues a show-cause notice, or recommends initiation, the case is referred to the National Faceless Penalty Centre.

The National Faceless Penalty Centre uses an automated system to assign the case to a specific penalty unit in a Regional Faceless Penalty Centre.

A penalty unit can either agree with the recommendation and prepare a draft show-cause notice to the assessee, or disagree with the recommendation and send its reasons to the National Faceless Penalty Centre.

The National Faceless Penalty Centre serves the show-cause notice to the assessee or any other person, specifying the date and time for filing a response.

Yes, if the penalty unit disagrees with the recommendation, the National Faceless Penalty Centre may decide not to initiate penalty proceedings.