‘Matter of right’ for assessee: I-T Dept allows oral hearing via video conferencing

The Income Tax Assessee can now avail an oral hearing through video conferencing (VC) as a matter of right under revised National Faceless Appeal (NFA) Scheme. Earlier it was at the discretion of the Income Tax Department

Originally, the scheme was launched in September last year. However, since then, it has been courting litigations and many courts ruled against certain provisions. Keeping all these in mind, the Finance Ministry has notified revised scheme — Faceless Appeal Scheme 2021—which will supersede the previous scheme.

One of most important changes is in Section 12. Under the new scheme, this section says a person shall not be required to appear either personally or through an authorised representative in connection with any proceedings under this scheme before the I-T authority at the NFA centre or appeal unit set up under this scheme.

Personal hearing request

“The appellant or his authorised representative, as the case may be, may request a personal hearing under this Scheme, so as to make his oral submissions or present his case before the Commissioner (Appeals), through the NFA centre. The concerned Commissioner (Appeals) shall allow the request for personal hearing and communicate the date and time of hearing to the appellant through the NFA centre,” it prescribes.

Earlier, it was prescribed that the Chief Commissioner or the Director General, in charge of the Regional Faceless Appeal Centre, under which the concerned appeal unit is set up, may approve the request for personal hearing. It will be subjected to various conditions. Now, all these have been revised.

‘New scheme simpler’

Chartered Accountant Ved Jain, former President of Institute of Chartered Accountants of India (ICAI) said that this change apparently has been done considering the challenge the old scheme faced in various High Courts, being in gross violation of principle of natural justice. The new scheme appears to be simple and addresses the issue of natural justice as the appellant can ask for oral hearing through VC as a matter of right and the same has to be allowed.

“Appellant must be given a fair and adequate opportunity to represent its case,” he said.

Earlier process cumbersome

Under the revised scheme there is a change in procedure also. Earlier the scheme was ‘appeal unit’ based. All power to condone delay in filing appeal, admitting additional grounds, additional evidences were with ‘appeal unit’. The appeal order was also to be prepared by ‘appeal unit’ as draft order. Further such draft order was to be further reviewed by another ‘appeal unit’.

In case ‘review appeal unit’ intends to vary draft order prepared by the first ‘appeal unit’, then it was to go to third ‘appeal unit’ for finalisation. The third ‘appeal unit’ was to finalise the appeal order. This order as finalised by third appeal unit was to be communicated to the appellant by Faceless Appeal Centre.

Now power with CIT-A

Now under the revised scheme all power of condonation, additional evidences, additional ground is with Commissioner of Income Tax- Appeal (CIT (A)) only. “No draft orders. No review of such order by another unit or another CIT (A). The CIT (A) to draft and finalise the order and this order will be shared with the appellant through Faceless Appeal Centre. Earlier it was ‘appeal unit’ based, now it is CIT (A) based,” Jain explained.