Faceless Assessment India — NaFAC Response & Representation

Expert CA representation in faceless income tax assessment under NaFAC. Electronic response preparation, document submission, and faceless appeal representation.

The Faceless Assessment Scheme — Overview

India's Faceless Assessment Scheme, fully operational since October 2020, represents the most significant reform to income tax administration in decades. By eliminating physical contact between taxpayers and Assessing Officers, it aims to reduce corruption, ensure objectivity, and create a consistent, documentation-driven assessment process. For taxpayers and their advisors, it requires a fundamentally different approach — all communication is written, electronically submitted, and must stand on its own without the benefit of in-person explanation.

  Key implication: In faceless assessment, your written response is your case. There is no "I'll explain when I meet the AO." Every document, every legal argument, every supporting calculation must be included in your portal submission. Poor documentation = poor outcome.

How Faceless Assessment Works — End to End

Stage 1: Case Selection and Assignment

Cases are selected for scrutiny by CASS (Computer Aided Scrutiny Selection) or manual selection. The case is assigned to a randomly chosen Assessment Unit at NaFAC — which could be in any part of India, with no connection to the taxpayer's home state or previous AO.

Stage 2: Section 143(2) Notice on Portal

The formal notice is uploaded to the taxpayer's IT portal account. An email and SMS alert is sent to registered email/mobile. The notice will specify: whether it is limited scrutiny (one or two specific issues) or complete scrutiny, and the initial response deadline.

Stage 3: Section 142(1) Questionnaire

The Assessment Unit issues queries through the portal (under Section 142(1) or as informal questions in the proceedings). These queries may be issued in multiple rounds as the case progresses. Each query has a response window of 10–30 days (specified in the query).

Stage 4: Verification Unit

The NaFAC may refer the case or specific documents to a Verification Unit for cross-checking — for example, to verify a vendor's GSTIN, check registration details of a creditor, or confirm bank account details. The Verification Unit's findings are communicated to the Assessment Unit, which may then issue follow-up queries.

Stage 5: Technical Unit (if applicable)

For complex cases involving valuation, transfer pricing, or technical aspects, the Assessment Unit may refer to a Technical Unit. The Technical Unit's opinion is used by the Assessment Unit in forming its view.

Stage 6: Show Cause Notice (if addition proposed)

Before any addition is made to income, the Assessment Unit must issue a Show Cause Notice (SCN) under Section 144B. The taxpayer has an opportunity to respond (typically 30 days). For additions above ₹10,000, the taxpayer can request a video conferencing personal hearing.

Stage 7: Draft Assessment Order (DAR)

The Assessment Unit prepares a Draft Assessment Order with proposed additions/disallowances. This is sent to the taxpayer through the portal. The taxpayer has 30 days to:

Accept the DAR (no objection — DAR becomes final order)
Object to the DAR by filing detailed objections

If objections are filed, the DAR goes to the Review Unit of NaFAC. The Review Unit independently examines the case and may uphold or modify the Assessment Unit's view.

Stage 8: Final Assessment Order

After the Review Unit process (if applicable), the final Assessment Order is issued. This order specifies all additions, tax demanded, and interest charged. It is uploaded to the portal.

Best Practices for Faceless Assessment Responses

Documentation First

Every claim, income, expenditure, and deduction must have a supporting document — scanned copy of invoice, contract, bank statement page, certificate
Upload documents in high-quality PDF format; portal submissions have file size limits — compress where needed
Create an index of all documents uploaded — the AO is reviewing hundreds of cases; make it easy for them to find relevant documents

Written Submissions — Structure

Start with a clear summary of the facts
Address each query point separately with a heading ("Response to Query No. 3: Cash Deposits")
Include all applicable legal provisions, notifications, and CBDT circulars
Cite at least 2–3 favourable judicial precedents (HC/SC/ITAT) for each contentious point
Conclude each point with a clear statement: "In view of the above, no addition is warranted / the deduction claimed is fully allowable"

Timing

Never let a portal deadline pass without a response — even a "holding" response acknowledging receipt and requesting extension is better than silence
Request extension through the portal if needed — the system provides an extension request mechanism
Start preparing responses at least 7–10 days before the deadline to allow for document collection

DAR Objections — The Most Critical Window

The 30-day window for filing objections to the Draft Assessment Order is the last opportunity before the final order is passed. If you miss this, the additions proposed in the DAR become final without any further opportunity to contest (except through appeal). Our practice specifically focuses on ensuring DAR objections are filed on time with comprehensive legal arguments — because a well-framed DAR objection that succeeds saves the entire appeal process.

Our Faceless Assessment Service

Notice analysis — scope, time limits, grounds raised
Complete response preparation for all portal questionnaires
Document collation, scanning, and indexed upload
Legal submissions with case law
Video conferencing personal hearing representation
DAR objections preparation and submission
Appeal to CIT(A) if final order makes additions

Received a faceless assessment notice? Portal deadlines cannot be extended easily — act now.

Get Faceless Assessment Help Call +91-9962 260 333

Frequently Asked Questions

What is the Faceless Assessment Scheme?

The Faceless Assessment Scheme (FAS) was launched in August 2020 under Section 144B of the Income Tax Act. It eliminates all physical contact between the taxpayer/tax officer and the Assessing Officer. Assessment is conducted electronically through a randomly assigned team at the National Faceless Assessment Centre (NaFAC), with no correlation between the taxpayer's location and the AO's location.

Which cases are covered under faceless assessment?

All scrutiny assessments (Section 143(3)), best judgment assessments (Section 144), and reassessments (Section 147) are conducted under the Faceless Assessment Scheme. Exceptions: Search-related assessments (Section 153A/C) and cases transferred for specific reasons remain outside the faceless scheme.

How does communication happen in faceless assessment?

All notices, questionnaires, and orders are issued through the Income Tax portal (incometaxindiaefiling.gov.in / www.incometax.gov.in). Taxpayers respond electronically through the portal by uploading documents and written submissions in the allotted response window. Email and SMS alerts are sent for each notice.

Can I request a personal hearing in faceless assessment?

Faceless assessment is designed to be without personal appearance. However, under Section 144B(6), if the NaFAC is considering making an addition exceeding ₹10,000, a Show Cause Notice must be issued and the taxpayer can request a personal hearing through video conferencing. The NFAC is required to provide this hearing.

What is a Draft Assessment Order (DAR) in faceless assessment?

Before passing the final assessment order with any additions, the NFAC must issue a Draft Assessment Order (DAR) to the taxpayer. The taxpayer has 30 days to file objections to the DAR. If the taxpayer objects, the DAR goes to the Review Unit for examination before the final order is passed.

Can the faceless assessment order be appealed?

Yes. An appeal against a faceless assessment order (under Section 143(3) read with 144B) is filed with the Commissioner of Income Tax (Appeals) under the Faceless Appeals Scheme. The CIT(A) under the faceless appeal is also typically at a different location from the taxpayer. From CIT(A), the next appeal is to ITAT.

What happens if I miss the response deadline in faceless assessment?

Missing the deadline can result in: (a) best judgment assessment under Section 144 (AO estimates income without the taxpayer's explanations), or (b) if a DAR deadline is missed, the final assessment order is passed with the proposed additions. You can still appeal the ex-parte order, but response to notices must be within the portal's deadline.

Faceless Appeals Scheme — The Next Layer

If the final faceless assessment order includes additions, the appeal goes to the Faceless Appeals Scheme at the Commissioner of Income Tax (Appeals) level. The CIT(A) under the Faceless Appeals Scheme is also not in the taxpayer's jurisdiction — the assignment is random. The appeal process is entirely electronic: Form 35 is filed on the portal; grounds of appeal and statement of facts are uploaded; the CIT(A) issues a questionnaire; the taxpayer responds; CIT(A) passes order. A 20% pre-deposit of the disputed tax demand is required to file the appeal (reduced from 100% by Finance Act 2020). The 20% is held pending the appeal and refunded with interest if the appeal is decided in the taxpayer's favour.

NFAC Escalation — Review Unit and Technical Unit

The NaFAC's multi-unit structure means that cases can be reviewed at multiple internal levels before the final order:

Assessment Unit: Conducts the primary assessment, raises queries, receives responses
Verification Unit: Cross-checks specific facts (GSTIN of a vendor, property registration, bank account ownership)
Technical Unit: Provides specialist opinion on valuation, transfer pricing, accounting standards
Review Unit: Reviews Draft Assessment Order when the taxpayer objects to the DAR; has the power to confirm, modify, or revise the Assessment Unit's proposed order

The Review Unit is independent of the Assessment Unit — this is a key safeguard. A taxpayer's DAR objections go to the Review Unit, which independently examines the case. If the Review Unit disagrees with the Assessment Unit, it can reduce or eliminate proposed additions.

Video Conferencing Hearings — How to Request

For additions above ₹10,000 proposed in a Draft Assessment Order, the taxpayer has the right to a personal hearing via video conferencing (Section 144B(6)). To exercise this right:

File your DAR objections within the 30-day window
In the objections, explicitly request a video conferencing hearing under Section 144B(6)
The NFAC must schedule this hearing; if it doesn't, raise the omission as a ground of appeal
Prepare a structured oral presentation of your key arguments for the VC hearing
After the hearing, follow up with written submissions summarising your oral arguments

Video conferencing hearings are more effective than they sound — having a CA present the case in person (via video) is significantly more impactful than written submissions alone, because the officer can ask follow-up questions and the CA can provide immediate answers.

Technical Issues on the IT Portal — What To Do

The NFAC portal frequently has technical issues — submission errors, upload failures, deadline extensions not reflecting, and notices not showing correctly. Protect yourself with a disciplined documentation protocol:

Always take a screenshot after each upload showing the file name and status (must show "Submitted" not just "Saved")
Download the portal acknowledgement PDF after every submission
If the portal is down close to a deadline, document the technical error (screenshot with date/time) and immediately email the system helpdesk (taxpayer.services@incometax.gov.in or the portal's grievance mechanism) requesting an extension
If extension is refused technically, physically submit a copy to the jurisdictional CPC / NaFAC within 24 hours of the deadline — with the technical error documentation
Courts have consistently held that NFAC orders passed without giving adequate opportunity due to genuine portal technical issues are procedurally invalid — document thoroughly

Condonation of Delay — Section 119(2)(b)

If a portal deadline is missed due to genuine hardship (illness of taxpayer, natural disaster, or technical failure), the taxpayer can apply for condonation of delay under Section 119(2)(b) to the CBDT. The CBDT has issued standard instructions for when condonation should be granted — genuine cases of hardship, technical failures on the portal, and circumstances beyond the taxpayer's control. Our team has successfully obtained condonation of delay in several faceless assessment cases where portal technical issues prevented timely submission.