Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live, machinery. Inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Empowers the Central Government to notify a scheme for faceless conduct of the inquiry/issuance of notice under section 142(1), the inquiry under 142(2), and the valuation reference under section 142A, to impart greater efficiency, transparency and accountability by eliminating the interface and using a team-based, jurisdiction-less mechanism.
FA 2026: The Finance Act, 2026 enables the faceless units to authenticate electronic records through electronic communication without affixing a digital signature, streamlining the faceless inquiry/valuation workflow.
A. SECTION COMMENTARY
Section 142B is the faceless overlay on the inquiry and valuation powers in sections 142(1), 142(2) and 142A. It authorises the Government to notify a scheme, and to direct (by notification laid before Parliament) that the provisions of those sections shall apply with such exceptions, modifications and adaptations as are required for faceless functioning. The objective mirrors that of faceless assessment under section 144B: to remove the personal interface, allocate work through automated systems, and build in dynamic jurisdiction.
The provision is enabling and procedural. Its content is supplied by the notified scheme. The legal controversies that have arisen in the faceless space concern the breach of natural justice (denial of personal hearing, non-consideration of replies) and are litigated principally under section 144B; the same principles apply to faceless inquiry and valuation under section 142B.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025).
142B. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of issuing notice under sub-section (1) or making inquiry before assessment under sub-section (2), or directing the assessee to get his accounts audited under sub-section (2A) of section 142, or estimating the value of any asset, property or investment by a Valuation Officer under section 142A, so as to impart greater efficiency, transparency and accountability by—
(a) eliminating the interface between the income-tax authority or Valuation Officer and the assessee or any person to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing a team-based issuance of notice or making of enquiries or issuance of directions or valuation with dynamic jurisdiction.
(2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:
Provided that no direction shall be issued after the 31st day of March, 2022.
(3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.
C. AUTHORITIES
Candour rule: section 142B has no direct merits authority of its own; the controlling principles come from the faceless-assessment jurisprudence under section 144B, applied by analogy.
1. Governing principles by analogy to faceless assessment
Natural justice in faceless proceedings — applied from section 144B jurisprudence
Position: Faceless inquiry and valuation under a section 142B scheme must observe natural justice — replies and objections must be considered, and where a personal hearing is sought it must be granted in accordance with the scheme. An order ignoring the assessee's response or denying a requested hearing is liable to be set aside, just as in faceless assessment.
Cognate authority: Mantra Industries Ltd. v. National Faceless Assessment Centre (Bombay HC, 2021) and Sanjay Aggarwal v. National Faceless Assessment Centre (Delhi HC, 2021) — see section 144B; these establish that breach of the faceless procedure/denial of hearing vitiates the order, a principle that governs section 142B faceless inquiry/valuation.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; orders of the Tribunal, Authority for Advance Rulings and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XIV — PROCEDURE FOR ASSESSMENT
Section 142B — Faceless Inquiry or Valuation
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live, machinery. Inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Empowers the Central Government to notify a scheme for faceless conduct of the inquiry/issuance of notice under section 142(1), the inquiry under 142(2), and the valuation reference under section 142A, to impart greater efficiency, transparency and accountability by eliminating the interface and using a team-based, jurisdiction-less mechanism.
FA 2026: The Finance Act, 2026 enables the faceless units to authenticate electronic records through electronic communication without affixing a digital signature, streamlining the faceless inquiry/valuation workflow.
A. SECTION COMMENTARY
Section 142B is the faceless overlay on the inquiry and valuation powers in sections 142(1), 142(2) and 142A. It authorises the Government to notify a scheme, and to direct (by notification laid before Parliament) that the provisions of those sections shall apply with such exceptions, modifications and adaptations as are required for faceless functioning. The objective mirrors that of faceless assessment under section 144B: to remove the personal interface, allocate work through automated systems, and build in dynamic jurisdiction.
The provision is enabling and procedural. Its content is supplied by the notified scheme. The legal controversies that have arisen in the faceless space concern the breach of natural justice (denial of personal hearing, non-consideration of replies) and are litigated principally under section 144B; the same principles apply to faceless inquiry and valuation under section 142B.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025).
142B. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of issuing notice under sub-section (1) or making inquiry before assessment under sub-section (2), or directing the assessee to get his accounts audited under sub-section (2A) of section 142, or estimating the value of any asset, property or investment by a Valuation Officer under section 142A, so as to impart greater efficiency, transparency and accountability by—
(a) eliminating the interface between the income-tax authority or Valuation Officer and the assessee or any person to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing a team-based issuance of notice or making of enquiries or issuance of directions or valuation with dynamic jurisdiction.
(2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:
Provided that no direction shall be issued after the 31st day of March, 2022.
(3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.
C. AUTHORITIES
Candour rule: section 142B has no direct merits authority of its own; the controlling principles come from the faceless-assessment jurisprudence under section 144B, applied by analogy.
1. Governing principles by analogy to faceless assessment
Natural justice in faceless proceedings — applied from section 144B jurisprudence
Position: Faceless inquiry and valuation under a section 142B scheme must observe natural justice — replies and objections must be considered, and where a personal hearing is sought it must be granted in accordance with the scheme. An order ignoring the assessee's response or denying a requested hearing is liable to be set aside, just as in faceless assessment.
Cognate authority: Mantra Industries Ltd. v. National Faceless Assessment Centre (Bombay HC, 2021) and Sanjay Aggarwal v. National Faceless Assessment Centre (Delhi HC, 2021) — see section 144B; these establish that breach of the faceless procedure/denial of hearing vitiates the order, a principle that governs section 142B faceless inquiry/valuation.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; Finance Act, 2026 changes are flagged in the commentary. Citations are stated as reported; orders of the Tribunal, Authority for Advance Rulings and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.