Faceless assessment and appeal orders passed in March often contain defects. Learn common errors under the faceless regime and how taxpayers can challenge them.
March is always the busiest month for the Income Tax Department. It is the time when faceless assessments, reassessments, and faceless appeal orders are rushed to closure before limitation deadlines expire.
In the faceless regime, where everything happens digitally, speed often comes at the cost of accuracy. As a result, many assessment orders passed in March suffer from serious procedural and legal defects.
For taxpayers, this creates both risk and opportunity. Risk because defective orders can lead to unnecessary tax demands. Opportunity because such defects can be successfully challenged before appellate authorities or even the High Court.
Consulting a reliable tax consultant in Gurgaon or an experienced CA firm in Gurgaon can help you identify defects, protect your rights, and challenge orders effectively.
This article explains the most common defects found in faceless assessment and faceless appeal orders, why they occur, and how taxpayers can protect themselves under the Income Tax Act.
The faceless assessment scheme was introduced to make income tax proceedings more transparent, technology-driven, and free from personal bias.
Under this system:
The scheme was notified by the Central Board of Direct Taxes (CBDT) and implemented through various notifications, known as the faceless assessment scheme under Section 144B of the Income‑Tax Act.
The National Faceless Assessment Centre (NFAC) acts as the central hub for faceless assessments.
Its role includes:
In theory, this team-based and technology-assisted approach should improve quality. In practice, especially in March, procedural lapses are common, making awareness of the faceless assessment procedure and judicial safeguards critical.
March is a pressure month due to:
This urgency leads to:
Read more: Special Tips To Handle Assessment Under Income Tax In The Face Less Era
One of the most frequent defects relates to notice under section 148 for reassessment.
Common issues:
Courts, including the Bombay High Court, have repeatedly held that such notices are invalid.
Section 144B lays down a detailed procedure for faceless assessments.
Defects include:
Such orders are often quashed as void ab initio.
Even under the faceless regime, the assessee has a right to request a personal hearing.
Common March defects:
Courts have held that denial of hearing violates principles of natural justice.
Many assessees upload detailed submissions, documents, and explanations on the income tax portal.
However, defective orders often:
Such assessment orders are vulnerable to challenge.
Under the faceless mechanism, cases are dynamically allocated. However:
Jurisdictional defects strike at the root of the assessment.
The national faceless appeal and regional faceless appeal centres were introduced to streamline appellate proceedings. Unfortunately, similar issues exist here as well.
Faceless appeal orders often:
Appeals must be decided on merits, not disposed of mechanically.
Defects include:
Such orders can be challenged before the High Court by writ petition.
Some faceless appeal orders are passed:
Limitation defects render the order invalid.
Reassessment under section 147 has been completely revamped. However, defects remain common.
Typical errors:
Such reassessments are frequently struck down.
Recommended: A Detailed Guide On How To Be Ready For Income Tax Assessment In India
The faceless regime is governed by:
Many orders fail to comply with the latest notification dated or amended procedure, making them legally unsustainable.
Faceless assessments are handled by:
In practice:
A writ petition before the High Court may be filed where:
High Courts have consistently intervened in such faceless assessment cases.
In eligible cases, the Dispute Resolution Panel plays a role.
Defects arise when:
Such orders are clearly unsustainable.
Know more: Brief Understanding On Income Tax Assessment
Courts have repeatedly emphasised that:
Faceless assessments must still comply with tax law and natural justice, as reflected in recent judicial trends on faceless assessment compliance.
The faceless regime is here to stay. While it aims to reduce discretion and increase transparency, procedural discipline is still evolving.
March 2026 orders, passed under pressure, are especially prone to defects. Taxpayers who understand these issues can effectively challenge unjust demands and protect their rights.
A faceless order is not final just because it is digital. Legality still matters.
For guidance and protection, consulting an experienced income tax consultant in Gurgaon can help ensure compliance and defend your rights.
Understand tax penalty proceedings. Learn about assessment under the Income Tax Act, when a penalty can be imposed, and initiation of proceedings.
Understand faceless assessments & appeals under Income Tax Act. Guide to the scheme, taxpayer rights, and handling notices.
GST Limitation Period ends March 31! Close notices & appeals under CGST Act Section 73 & 74. Know the time limit for GST demands, avoid penalties.
