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

Last updated: 13 January 2021

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This notification introduces the Faceless Penalty Scheme, 2021, outlining new procedures for imposing penalties under the Income Tax Act. It details how cases will be referred, assigned to penalty units, and reviewed. The scheme aims to make the penalty process more transparent and efficient by utilising technology and reducing the need for physical appearances. It also covers provisions for personal hearings via video conferencing and the rectification of mistakes.

MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) Notification No. 03/2021-Income Tax 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 to theFaceless Penalty Scheme, 2021made under sub-section (2A) of section 274 of the said Act, the Central Government hereby makes the following directions, namely:__

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FAQ :

The Faceless Penalty Scheme, 2021, is a new set of procedures introduced by the Central Government for imposing penalties under the Income Tax Act, 1961, designed to be conducted without the need for physical appearance before tax authorities.

Cases are referred to the National Faceless Penalty Centre, which then assigns them to specific penalty units in Regional Faceless Penalty Centres using an automated allocation system.

Yes, you can request a personal hearing to make oral submissions or present your case. If approved, the hearing will be conducted exclusively through video conferencing.

Notices and orders will be delivered electronically by placing an authenticated copy in your registered account, sending it to your registered email address, or uploading it to your mobile app, followed by a real-time alert.

An application for rectification can be filed by the assessee or relevant authorities. The National Faceless Penalty Centre will assign the application to a penalty unit for examination and a draft order, which will then be communicated.

Yes, the Principal Chief Commissioner or Principal Director General in charge of the National Faceless Penalty Centre may transfer proceedings to the relevant income-tax authority or National Faceless Assessment Centre if deemed necessary, with prior Board approval.

Notification No : 03/2021-Income Tax
Source : https://www.incometaxindia.gov.in/communications/notification/notification_no_3_2021.pdf

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