Context: The government’s faceless tax assessment scheme has managed to deliver about 24,000 final orders since its introduction in August 2020.
The Faceless Tax Assessment system is now stabilized and faceless appeals systems are now in place.

Transparent Taxation – Honouring the Honest (T2-H2)

• The Transparent Taxation – Honouring the Honest [T2-H2] is an extension of E-assessment scheme 2019 launched by Government of India.
• The new platform will be having Faceless Assessments, Faceless Appeal and Taxpayer Charter.
• Government has acknowledged that the country can move forward and can develop when the life of honest taxpayer is made easy and the launch of Taxpayer’s Charter is to ensure fair, courteous, and rational behaviour to the honest taxpayers.
• The issue of tax harassment by officers has gained a lot of attention in India and the government introduced faceless income tax assessment to reduce the scope for corruption and overreach by officials.
• The CBDT has given a framework and put in place a system in the form of this platform using technology such as data analytics and AI, a transparent efficient and accountable tax system.

Faceless Tax Assessment

• The Faceless Assessment aims to eliminate human interface between the taxpayer and the income tax department and the selection of a taxpayer is possible through systems using analytics and Artificial Intelligence.

Faceless Appeal System

• Under the Faceless Appeal system, appeals will be randomly allotted to any officer in the country. The identity of the officer deciding the appeal will remain unknown.

Criticism of Faceless Tax Assessment and Appeal System

• In a joint letter sent to the Central Board of Direct Taxes (CBDT) this month, representatives of the Income Tax Employees Federation and the Income Tax Gazetted Officers’ Association voiced their displeasure.
• Concerns were raised but tax officials that faceless tax assessment may reduce tax collection and raise pressure on officers that are under stress to meet lofty tax targets for the current fiscal year.

E-Assessment v/s Faceless Assessment

• In E-assessment the assessee will be aware of the assessing officer who will be carrying out the assessment proceedings.
• In Faceless Assessment, the assessee will not be aware of assessing officer who will be doing his tax assessment.
• The e-assessment was more of one assessing officer carrying out the assessment whereas in faceless assessment there will be a team of assessing officers who will be carrying out the assessment.