Faceless Income Tax Assessment FAQs in India

Faceless Income Tax Assessment allows specified income tax assessment proceedings to be conducted electronically through the Income Tax Department’s prescribed systems, generally without routine physical interaction between the taxpayer and the assessing authority.

Taxpayers receiving a faceless assessment notice often have practical questions: How should the notice be answered? What happens after submitting a reply? Can more time be requested? Is a video hearing available? What remedies exist if the assessment order is incorrect?

This article answers these and other frequently asked questions about faceless income tax assessment in India, including notices, electronic replies, show-cause proceedings, the National Faceless Assessment Centre (NaFAC), statutory deadlines and appellate remedies.

The Income-tax Act, 2025 came into force on 1 April 2026. However, assessments concerning earlier tax years may continue under the Income-tax Act, 1961 in accordance with the transitional and saving provisions. The correct statutory procedure must therefore be identified for each case.

For detailed procedural guidance, read our Faceless Income Tax Assessment Procedure in India. Taxpayers requiring representation can also explore our Income Tax Assessment and Litigation Services in India.

Basic FAQs About Faceless Income Tax Assessment

What is faceless income tax assessment?

Faceless income tax assessment is a statutory procedure through which specified assessments, reassessments or recomputations are conducted electronically.

Instead of routinely visiting an Income Tax Office, the taxpayer generally receives notices, uploads documents, submits explanations and communicates with the Department through the prescribed online system.

The faceless system is intended to reduce physical interaction, improve transparency and facilitate assessment through designated assessment, verification, technical and review functions.

What is the difference between e-assessment and faceless assessment?

E-assessment broadly refers to the use of electronic communication and online submission of information during assessment proceedings.

Faceless assessment refers more specifically to the statutory framework under which designated proceedings are allocated and conducted through prescribed electronic procedures.

The terms are frequently used interchangeably, but the specific legal framework applicable to a case must be examined.

Is faceless assessment a separate type of income tax assessment?

No. Faceless assessment is generally a method of conducting specified assessment proceedings rather than a separate substantive assessment category.

Depending on the applicable legislation and case category, scrutiny, best judgment or reassessment proceedings may be conducted through the prescribed faceless framework.

For the distinction between different assessment categories, see Different Types of Income Tax Assessment in India.

Does every income tax return undergo faceless scrutiny?

No. Filing an income tax return does not automatically result in detailed scrutiny assessment.

Routine return processing and scrutiny assessment are different procedures. Cases are selected for scrutiny in accordance with applicable statutory and administrative selection criteria.

Read our Income Tax Scrutiny Assessment Guide for an explanation of selection, notices and documentary requirements.

What is the National Faceless Assessment Centre (NaFAC)?

The National Faceless Assessment Centre coordinates prescribed functions involved in faceless assessment proceedings.

Depending on the applicable framework, its functions include allocation of cases, electronic communication of notices, forwarding taxpayer responses and coordination with designated assessment units.

NaFAC is distinct from the National Faceless Appeal Centre and other authorities involved in appellate proceedings.

FAQs About Receiving a Faceless Assessment Notice

How will a taxpayer know that the return has been selected for faceless assessment?

A taxpayer generally becomes aware of faceless assessment proceedings when an electronic notice or communication is made available in the registered account on the Income Tax Department’s e-Filing Portal.

The taxpayer may also receive alerts on the registered email address or mobile number. However, an alert should not replace checking the actual notice and related documents available on the portal.

For proceedings governed by the Income-tax Act, 1961, a scrutiny assessment may involve a notice under section 143(2). Under the Income-tax Act, 2025, the relevant framework includes section 270(8), subject to the governing provisions.

What should be done immediately after receiving an income tax assessment notice?

The taxpayer should first verify the notice on the official Income Tax Department e-Filing Portal.

Check the PAN, relevant assessment or tax year, statutory provision, notice date, response deadline, questions raised and supporting documents requested.

The notice should then be compared with the income tax return, computation, financial statements, AIS, Form 26AS and other relevant records before preparing a reply.

How can a taxpayer check whether an assessment notice is genuine?

Taxpayers should verify communications through the official Income Tax Department portal and applicable notice-authentication facilities.

Where relevant, check the Document Identification Number (DIN) and other identifying details under the applicable departmental requirements.

Do not respond to suspicious emails by disclosing passwords, OTPs or confidential financial information through unverified links.

What is the difference between a notice under section 142(1) and section 143(2)?

Under the Income-tax Act, 1961, section 142(1) may be used to call for a return, information, accounts or documents for the purposes of inquiry or assessment.

Section 143(2) is associated with scrutiny examination of a return.

The procedural implications depend on the applicable Act, relevant assessment year and actual notice. A section 142(1) notice does not invariably have to precede a section 143(2) notice.

For a broader explanation, read our guide on Types of Income Tax Notices in India.

Can a notice received in 2026 still refer to the Income-tax Act, 1961?

Yes. The Income-tax Act, 2025 came into force on 1 April 2026, but earlier tax years and specified proceedings continue to be governed by the Income-tax Act, 1961 under the applicable transitional and saving provisions.

Therefore, the year in which a notice is received does not alone determine the law governing the proceeding.

The Income Tax Department’s FAQs on the scope of the new Income-tax Act explain the concurrent administration of both statutory frameworks.

FAQs About Filing Replies Through e-Proceedings

How should a taxpayer respond to a faceless assessment notice?

The reply should be prepared after carefully reviewing the notice, identifying every question and collecting the relevant supporting documents.

For a notice containing multiple questions, the response should ordinarily address each issue separately, with appropriate explanations, reconciliations and documentary annexures.

The completed response should be submitted through the prescribed e-Proceedings facility or other applicable electronic channel before the deadline.

For detailed guidance, refer to How to Respond to an Income Tax Notice in India.

Where can the taxpayer submit the reply online?

For relevant proceedings, the taxpayer should sign in to the Income Tax Department’s e-Filing Portal and locate the pending notice through the e-Proceedings or applicable pending-action facility.

The official departmental guide describes the route through Pending Actions and e-Proceedings for the relevant portal interface. Actual menu labels and available functions may change.

The taxpayer should download the complete notice, prepare the reply and submit it through the designated response facility.

Which documents are commonly required during faceless assessment?

The documents depend on the subject of the inquiry. Commonly required records may include:

• Income tax return and income computation
• Financial statements and tax audit report, where applicable
• Form 26AS, AIS and TIS
• Bank statements and transaction explanations
• Ledger extracts and invoices
• GST returns and turnover reconciliations
• Loan agreements and confirmations
• Contracts and related-party transaction documents
• Previous notices, replies and assessment orders

Only documents relevant to the issues raised and otherwise lawfully required should be furnished. Unnecessary disclosure of unrelated confidential information should be avoided.

Can supporting documents be uploaded separately from the written reply?

The available upload and response options depend on the notice and portal functionality.

Where the system allows multiple attachments or a partial response, taxpayers should follow the applicable instructions and maintain a clear index of documents.

Do not assume that uploading documents without an explanatory reply fully answers the Department’s questions.

What should be done after submitting the reply?

Save the final written submission, supporting documents, acknowledgement and transaction reference.

The taxpayer should continue monitoring the portal because the Department may issue further questions, seek clarifications, propose an adjustment or communicate the assessment order.

Can a taxpayer request additional time to respond?

Where permitted, the taxpayer may request an extension or adjournment through the prescribed portal facility, giving a genuine reason and the additional time required.

There is no universal entitlement to a fixed 15-day extension in every faceless assessment proceeding. The applicable procedure and the authority’s decision must be considered.

It is preferable to submit an extension request before the original deadline expires.

FAQs About What Happens After the First Reply

What happens after a reply to a section 143(2) notice is submitted?

In an applicable faceless assessment proceeding, the response is considered by the designated assessment function through the prescribed electronic process.

Depending on the facts and statutory procedure, the assessment unit may accept the explanation, seek further information, request verification or technical assistance, or propose an adverse variation.

If an adverse variation is proposed, the taxpayer may receive a show-cause notice requiring a response.

The authority then proceeds towards completion of assessment after following the applicable procedural requirements and considering the available material.

Can the Department ask for additional documents after the first reply?

Yes. The assessment function may require additional information, reconciliations, explanations or evidence where permitted by law.

Each additional notice should be reviewed independently, and the taxpayer should respond within the specified deadline or seek an extension where permitted.

What is a show-cause notice in faceless assessment?

A show-cause notice identifies proposed adverse findings or variations and requires the taxpayer to explain why the proposed treatment should not be adopted.

Examples may include proposed additions for unexplained credits, disallowance of expenditure or differences between reported income and available financial information.

The taxpayer should answer each allegation with relevant facts, supporting evidence and applicable legal provisions.

What happens if the Department accepts the taxpayer’s explanation?

Where the assessment function is satisfied with the explanation and no adverse variation is warranted, the proceeding may be completed without the proposed addition or disallowance.

The final outcome depends on the complete assessment record, applicable procedure and findings of the competent authority.

Can a faceless assessment result in a best judgment assessment?

Yes, where the statutory conditions for best judgment assessment are satisfied.

Under the Income-tax Act, 1961, section 144 deals with best judgment assessment. Under the Income-tax Act, 2025, section 271 contains the corresponding framework for proceedings governed by that legislation.

Failure to comply with prescribed notices may lead to adverse consequences, but the authority must follow the applicable statutory procedure.

FAQs About Video Hearings and Taxpayer Rights

Can the taxpayer request a personal hearing during faceless assessment?

Yes, where the applicable statutory procedure provides for a personal hearing.

Under the relevant version of section 144B of the Income-tax Act, 1961, a taxpayer or authorised representative may request a hearing in connection with a proposed adverse variation. The statutory conditions and prescribed procedure govern how the request is handled.

For proceedings under the Income-tax Act, 2025, the relevant requirements of section 273 and Rule 176 should be examined.

How is a hearing conducted in faceless assessment?

Where a hearing is provided under the faceless procedure, it is generally conducted through video conferencing or another prescribed electronic facility.

The taxpayer should ensure that the relevant evidence, written submissions and transaction explanations are available during the hearing.

What if the Department does not consider a hearing request?

The taxpayer should preserve the hearing request, electronic acknowledgement and related correspondence.

Whether the absence of a hearing amounts to a procedural defect must be determined from the governing law, nature of the proposed variation and facts of the particular proceeding.

Any procedural objection should be evaluated promptly rather than assuming that the assessment order is automatically invalid.

Can a Chartered Accountant represent a taxpayer in faceless assessment?

A duly authorised Chartered Accountant may assist or represent taxpayers in eligible income tax proceedings, subject to statutory and procedural requirements.

Professional assistance may include financial reconciliations, documentary evidence, drafting replies, legal submissions, hearing preparation and assessment-order review.

Received an income tax assessment or show-cause notice? EzyBiz India Consulting LLP assists taxpayers with notice analysis, factual reconciliations, written submissions and representation in eligible proceedings.

FAQs About Time Limits, Non-Compliance and Assessment Orders

What is the time limit for responding to a faceless assessment notice?

The response period depends on the type of notice, applicable law and governing procedure.

The taxpayer should comply with the deadline specified in the notice and should not assume that every faceless assessment notice provides the same response period.

What happens if a taxpayer ignores a faceless assessment notice?

Failure to respond may result in further notices, best judgment proceedings, adverse assessment findings or other consequences where the statutory conditions are satisfied.

Where a deadline has already passed, the taxpayer should promptly examine whether any response, extension request or other procedural remedy remains available.

How will the taxpayer receive the final assessment order?

The assessment order and related communications are ordinarily made available electronically through the prescribed system.

Depending on the outcome, the taxpayer may also receive a tax computation, demand notice, refund information or a separate penalty-related communication.

Does every faceless assessment result in additional tax demand?

No. A faceless assessment may be completed without additional tax liability if the returned position is accepted or if the final determination does not give rise to further demand.

Any tax demand should be checked against the assessment order, computation, tax credits and payments already made.

What should be done if an assessment order contains an error?

The taxpayer should first identify whether the matter involves an apparent computational or record-based mistake, a disputed factual finding, or a question of law.

An apparent error may be suitable for rectification, while a substantive disputed addition or disallowance may require an appeal.

FAQs About Appeals and Remedies Against Faceless Assessment

What can a taxpayer do if dissatisfied with the faceless assessment order?

The appropriate remedy depends on the nature of the issue. Possible remedies include:

• Rectification for an eligible mistake apparent from the record
• Statutory appeal against an appealable assessment or penalty order
• Stay application for disputed tax demand where appropriate
• Further appellate remedies under the applicable statutory framework

For details, read our guide on Appeal Against an Income Tax Assessment Order.

Which form is used for filing an income tax appeal?

The applicable appeal form depends on the law governing the relevant proceeding.

Form 35 is relevant for first appeals under the Income-tax Act, 1961, while Form 99 is prescribed for relevant first appeals governed by the Income-tax Act, 2025.

Taxpayers should verify the form, appealable order, prescribed limitation and applicable instructions for the particular case.

What is the usual time limit for filing an income tax appeal?

The statutory period for a first appeal is commonly 30 days from the relevant event prescribed by law, such as service of the notice of demand or communication of the order, depending on the case.

The exact calculation and possibility of condonation must be examined under the governing Act and the facts.

Does filing an appeal automatically stop tax recovery?

No. Filing an appeal does not automatically stay recovery of the disputed tax demand.

Where appropriate, the taxpayer may need to submit a separate stay application addressing the disputed demand, merits of the case and relevant circumstances.

Read our guide on Stay of Income Tax Demand After Assessment Order.

Can a faceless assessment dispute reach the ITAT?

Yes, where the applicable statutory provisions permit an appeal before the Income Tax Appellate Tribunal.

The availability of an ITAT appeal depends on the order under challenge, relevant appellate stage and statutory conditions.

Learn about electronic appellate proceedings in our article on E-Appeal Schemes in Income Tax.

FAQs About the Income-tax Act, 2025 and Faceless Assessment

Which provisions govern faceless assessment under the Income-tax Act, 1961?

Section 144B provides the principal faceless-assessment procedure for specified proceedings governed by the Income-tax Act, 1961.

The procedure addresses electronic communication, automated allocation, assessment functions, documentary requests, show-cause notices and hearings under the applicable provisions.

Which provisions govern faceless assessment under the Income-tax Act, 2025?

Section 273 of the Income-tax Act, 2025 establishes the statutory framework for faceless assessment in specified cases.

Rule 176 of the Income-tax Rules, 2026 provides the relevant procedural requirements for assessment, reassessment or recomputation under the prescribed framework.

Will faceless assessment continue under the new Income-tax Act?

Yes. The Income-tax Act, 2025 continues the faceless-assessment framework, with provisions for electronic assessment and designated administrative functions.

The Income Tax Department’s official guidance confirms that the faceless system continues under the new Act, subject to the applicable statutory framework and specified cases.

Do the 1961 and 2025 Income Tax Acts operate together in 2026?

The Income-tax Act, 2025 applies from 1 April 2026, while the provisions of the earlier Income-tax Act, 1961 continue to govern relevant earlier tax years and preserved proceedings under the transitional and saving provisions.

As a result, both legislative frameworks may remain relevant for departmental proceedings during 2026 and subsequent years.

Practical FAQs for Companies and Foreign-Owned Subsidiaries

Can a company face faceless scrutiny for a GST and income tax turnover mismatch?

Yes. A company may be asked to reconcile turnover reported in GST returns with revenue disclosed in its financial statements and income tax return.

A suitable response may involve a reconciliation of invoice dates, advances, credit notes, accounting classifications and other relevant differences.

What happens when unsecured loans or share capital are questioned?

The company may need to provide documents establishing relevant transaction details, identity, genuineness, creditworthiness or other facts required under the applicable law.

The exact evidence depends on the allegations and statutory provisions invoked.

Can foreign-owned Indian subsidiaries receive faceless assessment notices?

Yes. Foreign-owned subsidiaries may receive assessment notices concerning Indian taxable income, expenditure, related-party transactions, foreign remittances, withholding tax or other relevant matters.

Specialised corporate tax and international tax questions may require coordinated examination of agreements, financial records, transfer pricing documentation and supporting tax positions.

Can a faceless assessment involve allegedly bogus purchases or unexplained credits?

Yes. The Department may examine the genuineness and commercial substance of transactions, supported by invoices, agreements, transportation evidence, ledger records, banking documents and other relevant material.

Read our specialist article on Income Tax Assessment Involving Fictitious or Bogus Transactions.

Professional Assistance for Faceless Income Tax Assessments

How Can EzyBiz Help With a Faceless Assessment Notice?

EzyBiz India Consulting LLP provides Chartered Accountant-led assistance covering notice review, examination of tax records, financial reconciliations, preparation of issue-wise replies and authorised representation in eligible proceedings.

Can EzyBiz Assist With Show-Cause Replies and Hearings?

Yes. We assist with reviewing proposed additions or disallowances, preparing supporting evidence and written submissions, and addressing applicable hearing procedures.

Does EzyBiz Assist After an Assessment Order Is Passed?

Yes. Depending on the case, our services may include assessment-order analysis, rectification, tax demand reconciliation, stay applications and appellate assistance.

Our Income Tax Assessment and Litigation Services in India cover the broader assessment and dispute-resolution process.

Related Income Tax Guides and Services

• Income Tax Assessment and Litigation Services in India
• Faceless Income Tax Assessment Procedure
• Income Tax Scrutiny Assessment
• Different Types of Income Tax Assessment
• How to Respond to Income Tax Notices
• Types of Income Tax Notices in India
• Income Tax Appeal Against Assessment Order
• Stay of Income Tax Demand
• Income Tax E-Appeal Scheme
• Direct Tax Advisory Services in India

Official Income Tax References

• Income Tax Department — Faceless Assessment Scheme and Online Procedure
• Income-tax Act, 1961 — Section 144B
• Income-tax Rules, 2026 — Rule 176
• Income Tax Department — FAQs on the Income-tax Act, 2025
• Income Tax Department e-Filing Portal

Need assistance with a faceless assessment notice, show-cause reply or an adverse tax order? Contact EzyBiz India Consulting LLP for professional assessment and litigation assistance.

Email: anil@ezybizindia.in
Phone: +91 98992 17778