MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 27th May, 2022
(INCOME-TAX)
S.O. 2426(E).—In exercise of the powers conferred by sub-section (2B) of section 274 of the
Income-tax Act, 1961 (43 of 1961)(hereinafter referred to as ―the Act‖) and in consequence to the
amendments made in section 144B of the Act vide the Finance Act, 2022, for the purposes of giving effect
to the Faceless Penalty (Amendment) Scheme, 2022 made under sub-section (2A) of section 274 of the Act,
the Central Government hereby makes the following amendments in the notification of the Government of
India, Ministry of Finance (Department of Revenue), Central Board of Direct Taxes published in the
Gazette of India, Extraordinary vide number S.O. 118(E), dated the 12th January, 2021, namely:__
- In the said notification,––
- (i) in paragraph 1,––
- (a) in sub-paragraph (A), in clause (1),––
- (I) in sub-clause (ii), the words ―in any one of the Regional Faceless Penalty Centres‖ shall be
omitted;
- (II) for the clauses (xv) to (xxii), the following clause shall be substituted, namely:––
―(xv) the penalty unit shall, after considering the material on record including response furnished, if
any, as referred to in clauses (viii), (x) and (xii) or report, if any, as referred to in clause (xiv),
propose for,––
- (a) imposition of the penalty and prepare a penalty imposition proposal for imposition of
such penalty;
- (b) non-imposition of the penalty, for reasons to be recorded in writing
and send the penalty imposition proposal or reasons, as the case may be, to the National Faceless
Penalty Centre;
(xvi) the National Faceless Penalty Centre, in accordance with the guidelines issued by the Board,
may,––
- (a) in a case where imposition of penalty has been proposed, convey to the penalty unit to pass
the penalty order as per penalty imposition proposal referred to in sub-clause (a) of clause
(xv); or
- (b) in a case where non-imposition of penalty has been proposed, convey to the penalty unit to
drop the penalty proceedings under intimation to the assessee or any other person, as the
case may be; or
- (c) assign the case to a penalty review unit through an automated allocation system, for
conducting review of such proposal or reasons, as the case may be;
(xvii) the penalty unit shall, in the case referred to in sub-clause (a) of clause (xvi), pass the order
imposing penalty and serve the same on the assessee through the National Faceless Penalty Centre;
(xviii) the penalty unit shall, in the case referred to in sub-clause (b) of clause (xvi), drop the penalty
proceedings and send the intimation to the assessee through the National Faceless Penalty Centre;
(xix) the penalty review unit shall review the penalty imposition proposal or reasons for non-imposition
of penalty, as referred to in sub-clause (c) of clause (xvi), whereupon it may concur with, or suggest
modification to, such proposal or reasons, as the case may be, and prepare a review report and send
such report to the National Faceless Penalty Centre;
(xx) the National Faceless Penalty Centre shall, upon receiving the review report under clause (xix),
forward the same to the penalty unit which had proposed the penalty imposition proposal or reasons for
non-imposition of penalty, as the case may be;
(xxi) the penalty unit shall, after considering such review report, accept or reject some or all of the
modifications proposed therein and after recording reasons in case of rejection of such modifications,
pass the order imposing penalty or drop the penalty proceedings, as the case may be, and serve the
order imposing penalty or intimation for dropping penalty proceedings, as the case may be, on the
assessee through the National Faceless Penalty Centre;
(xxii) where an order imposing penalty or intimation for dropping penalty, as the case may be, has been
passed, the penalty unit shall send a copy of such order, or intimation for dropping penalty to the
income-tax authority, referred to in clause (i), through the National Faceless Penalty Centre, for further
action as may be required under the Act.‖;
- (b) in sub-paragraph (B),––
- (I) in clause (1), the words ―or Regional Faceless Penalty Centre‖ shall be omitted;
- (II) for clauses (3) and (4), the following clause shall be substituted, namely:––
―(3) Where the request for personal hearing has been received, the income-tax authority of relevant
unit shall allow such hearing, through National Faceless Penalty Centre.
- (4) Hearing referred to in clause (3) shall be conducted exclusively through video conferencing or
video telephony, including use of any telecommunication application software which supports
video conferencing or video telephony, to the extent technologically feasible, in accordance with
the procedure laid down by the Board.‖;
- (ii) [unclear in source]
- (iii) for paragraph 2, the following paragraph shall be substituted, namely:––
―2. The provisions of section 140 and section 282A of the said Act shall apply to the penalty
proceedings in accordance with the said Scheme subject to the following exceptions, modifications and
adaptations, namely:—
―an electronic record shall be authenticated by,––
- (i) the National Faceless Penalty Centre by way of an electronic communication;
- (ii) the penalty unit or the penalty review unit or technical unit or verification unit, as the case may
be, by affixing digital signature;
- (ii) assessee or any other person, by affixing his digital signature or under electronic verification
code, or by logging into his registered account in the designated portal.
Explanation. – For the purpose of this paragraph, ―electronic verification code‖ shall have the same
meaning assigned to it in the Explanation to sub-rule (3) of rule 12 of the Income-tax Rules,
1962.‖;
- (iv) paragraph 3 shall be omitted;
- (v) in paragraph 4, in sub-paragraph (B),––
- (A) the words ―the Regional Faceless Penalty Centre,‖ shall be omitted;
- (B) clause (ix), shall be omitted.
- This notification shall come into force on the date of its publication in the Official Gazette.
[Notification No. 55/2022/F. No. 370142/51/2020-TPL(Part III)]
SHEFALI SINGH, Under Secy., Tax Policy and Legislation
Note : Principal Scheme was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-
section (ii) vide number S.O. 118(E) dated the 12th January, 2021.
