Section 273 — Faceless Assessment | ITA 2025

Section 273 — - FACELESS ASSESSMENT

Section 273 is the substantive equivalent of 1961 s. 144B -- the FACELESS ASSESSMENT FRAMEWORK introduced FA 2020 and operationalised by CBDT Notification dated 13-Aug-2020. The provision establishes the DIGITAL-ONLY ASSESSMENT ARCHITECTURE with NATIONAL FACELESS ASSESSMENT CENTRE (NFAC) Bengaluru as central hub, supported by REGIONAL FACELESS ASSESSMENT CENTRES (ReFACs), Assessment Units (AUs), Verification Units (VUs), Technical Units (TUs), and Review Units (RUs) located across India. Section 273 mandates that assessment under sub-ss. 6-10 of s. 270 / s. 271 (best-judgment) shall be CONDUCTED IN A FACELESS MANNER -- no physical interface between AO and assessee; all communications via e-portal; dynamic case allocation; review-board mechanism. The architecture replaces the traditional jurisdictional-AO-based assessment with a centralised algorithmic-allocation system. Practitioner-grade rule: every scrutiny case post-2020 follows faceless mechanics; physical hearing only in personal-hearing requests under FA 2022.

Statutory text — Income-tax Act, 2025

Marginal note -- Faceless Assessment

(1) Irrespective of anything to the contrary contained in any other provision of this Act, the assessment, reassessment or recomputation under section 270(10) or 271 or 279, as the case may be, with respect to the cases referred to in sub-section (2), shall be made in a faceless manner as per such procedure, as may be prescribed in this behalf.

(2) The faceless assessment under sub-section (1) shall be made in respect of such territorial area, or persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board.

(3) The Board may, for the purposes of faceless assessment, set up the following Centre and Units and specify their functions and jurisdiction:—

(a) a National Faceless Assessment Centre to facilitate the conduct of faceless assessment proceedings in a centralised manner including assigning the case selected for the purposes of faceless assessment under this section to a specific assessment unit, intimating the assessee that assessment in his case shall be completed in accordance with the provision of this section, serving a notice to the assessee under section 268(1) or 270(8), and forwarding any response of the assessee to the assessment unit;

(b) such assessment units, as it may deem necessary to conduct the face- less assessment, to perform the function of making assessment, which includes analysis of the material furnished by the assessee or any other person, identification of points or issues material for the determination of any liability (including refund) under this Act, seeking information or clarification on points or issues so identified, determination of any variation prejudicial to the assessee, and such other functions as may be required for the purposes of making faceless assessment;

(c) such verification units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of verification, which includes enquiry, cross verification, examination of books of account, examination of witnesses and recording of statements, and such other functions as may be required for the purposes of verification;

(d) such technical units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of providing technical assistance which includes any assistance or advice on legal, accounting, forensic, information technology, valuation, transfer pricing, data ana- lytics, management or any other technical matter under this Act or an agreement entered into under section 159, which may be required in a particular case or a class of cases, under this section;

(e) such review units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of review of any variation proposed by the assessment unit (wherever it is so considered necessary by the National Faceless Assessment Centre), which includes checking whether the relevant and material evidence has been brought on record, relevant points of fact and law have been duly incorporated, the issues requiring addition or disallowance have been incorporated and such other functions as may be required for the purposes of review.

(4) In accordance with the procedure as may be prescribed under sub-section (1),—

(a) the verification unit, the technical unit and the review unit shall facilitate the conduct of faceless assessment; and

(b) the assessment unit shall—

(i) make the assessment of the total income or loss by an order in writing after taking into account all relevant material which it has gathered and after giving the assessee an opportunity of being heard, and may also initiate penalty proceedings, if any;

(ii) determine the sum payable by the assessee or refund of any amount due to him on the basis of such assessment.

(5) For the purposes of this section, the terms “assessment unit”, “verification unit”, “technical unit” and “review unit” shall refer to an Assessing Officer having powers so assigned by the Board.

(6) The assessment unit, verification unit, technical unit and the review unit shall have the following authorities:—

(a) Additional Commissioner or Additional Director or Joint Commissioner or Joint Director, as the case may be;

(b) Deputy Commissioner or Deputy Director or Assistant Commissioner or Assistant Director, or Income-tax Officer, as the case may be;

(c) such other income-tax authority, ministerial staff, executive or consultant, as may be considered necessary by the Board.

(7) All communications, save as otherwise provided in sub-section (8),—

(a) among the assessment unit, review unit, verification unit or technical unit or with the assessee or any other person with respect to the informa- tion or documents or evidence or any other details, as may be necessary for the purposes of making a faceless assessment shall be through the National Faceless Assessment Centre;

(b) between the National Faceless Assessment Centre and the assessee, or his authorised representative, or any other person shall be exchanged exclusively by electronic mode; and

(c) between the National Faceless Assessment Centre and various units shall be exchanged exclusively by electronic mode.

(8) The provisions of sub-section (7) shall not apply to the enquiry or verification conducted by the verification unit in the circumstances as specified by the Board in this behalf.

(9) The Principal Chief Commissioner or the Principal Director General, as the case may be, in-charge of the National Faceless Assessment Centre shall, in accordance with the procedure laid down by the Board in this regard, if he considers appropriate that the provisions of section 268(5) may be invoked in the case,—

(a) forward any reference received from an assessment unit in this regard to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner having jurisdiction over such case, and inform the assessment unit accordingly;

(b) transfer the case to the Assessing Officer having jurisdiction over such case as per sub-section (12).

(10) Where a reference has been received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner under sub-sec- tion (9)(a), he shall direct the Assessing Officer, having jurisdiction over the case, to invoke the provisions of section 268(5).

(11) Where a reference has not been forwarded as per sub-section (9)(a) to the Prin- cipal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, having jurisdiction over the case, the assessment unit shall proceed to complete the assessment as per the procedure laid down in this section.

(12) Irrespective of anything contained in sub-section (1) or (2), the Principal Chief Commissioner or the Principal Director General, as the case may be, in charge of National Faceless Assessment Centre may, at any stage of the assessment, if con- sidered necessary, transfer the case to the Assessing Officer having jurisdiction over such case, with the prior approval of the Board.

(13) For the purposes of this section,—

(a) “designated portal” means the web portal designated as such by the Prin- cipal Chief Commissioner or the Principal Director General, in charge of the National Faceless Assessment Centre;

(b) “faceless assessment” means the assessment proceedings conducted electronically in “e-Proceeding” facility through registered account of the assessee in designated portal; and

(c) “registered account” of the assessee means the electronic filing account registered by the assessee in designated portal. Reference to Principal Commissioner or Commissioner in certain cases.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 273	INCOME-TAX ACT, 1961 -- s. 144B
Sub-s. (1) -- Faceless assessment scheme	1961 s. 144B(1)
NFAC / ReFAC / AU / VU / TU / RU architecture	1961 s. 144B(2)
Dynamic case allocation algorithm	1961 s. 144B(3) read with CBDT Notification 13-Aug-2020
Draft assessment order procedure	1961 s. 144B(1)(xvi)
Review by RU before finalisation	1961 s. 144B(1)(xvii)
Personal hearing via video conference (FA 2022)	1961 s. 144B(6)/(7) [FA 2022]
Show-cause notice mandatory before adverse order	1961 s. 144B(1)(xvi)(b)

STATUTORY ARCHITECTURE -- THE NFAC FRAMEWORK

ORGANISATIONAL STRUCTURE: (I) NATIONAL FACELESS ASSESSMENT CENTRE (NFAC) Bengaluru -- apex coordinating body; allocates cases / coordinates units / receives final orders. (II) REGIONAL FACELESS ASSESSMENT CENTRES (ReFACs) -- 10+ across major cities (Mumbai / Delhi / Chennai / Kolkata / Bengaluru / Ahmedabad / Hyderabad / Pune / Chandigarh / etc.); supervisory level. (III) ASSESSMENT UNITS (AUs) -- conduct primary assessment; AO-equivalent unit; multiple AUs per ReFAC. (IV) VERIFICATION UNITS (VUs) -- handle inquiries / cross-verification of information / physical-on-site-inquiry where unavoidable. (V) TECHNICAL UNITS (TUs) -- specialised technical / legal / accountancy assistance to AUs (TP / international tax / sectoral expertise). (VI) REVIEW UNITS (RUs) -- review draft assessment orders before finalisation; check legal / factual soundness; high-quality control mechanism. PROCEDURAL FLOW: (a) Notice issued by NFAC to assessee through e-portal; (b) Response submitted online via e-filing; (c) Case dynamically allocated to AU (anywhere in India; no jurisdictional bias); (d) AU may seek inquiry through VU / technical input through TU; (e) AU prepares DRAFT ASSESSMENT ORDER; (f) Draft sent to RU for review; (g) Show-cause notice / personal-hearing opportunity (FA 2022) to assessee; (h) Assessee submits response; (i) AU finalises with RU's input; (j) FINAL ASSESSMENT ORDER issued through NFAC.

PERSONAL HEARING (FA 2022 EXPANSION)

PRE-FA 2022: faceless assessment was strict text/document-only; no oral interaction. POST FA 2022 (sub-s. 6/7 equivalent): assessee may REQUEST personal hearing via video conference where: (a) Variation prejudicial to assessee proposed in draft order; OR (b) Specific provisions allow oral hearing. Hearing conducted via VC / video conferencing facility set up at ReFAC; recorded for record. Critical procedural protection -- restored due-process guarantees post natural-justice concerns raised by Bombay HC / Madras HC / Delhi HC in 2020-2021.

EXCLUSIONS / CARVE-OUTS

Faceless framework does NOT apply to: (a) Search-and-seizure assessments under s. 247 / 1961 s. 132 (handled by Investigation wing, jurisdictional); (b) Surveys under s. 253 / 1961 s. 133A (handled by jurisdictional AO); (c) International transactions / TP-driven assessments under ss. 161-166 (handled by TPO with own faceless TP scheme); (d) Cases requiring physical inquiry impossible to handle remotely; (e) Cases at PCIT/CIT level review under s. 274 (different framework). Other notable: charitable trust registration / 80G approval / PCIT revisions handled separately under their own faceless schemes (per CBDT Notifications 2021-2024).

CASE LAW / NATURAL-JUSTICE LITIGATION

(i) Bharat Aluminium Co. Ltd v. UoI (Bom HC, 2021) -- early faceless assessment without personal hearing; HC remanded for de novo with hearing. (ii) Madras HC / Delhi HC parallel rulings (2021) -- natural justice / personal hearing right preserved despite faceless. (iii) FA 2022 codified personal-hearing right via VC. (iv) Various ITAT decisions on faceless-assessment procedural defects -- show-cause inadequate / response time too short / etc. -- typically remanded for re-assessment with proper procedure. (v) PCIT v. Bhakra Beas Management Board (Del HC, 2023) -- faceless assessment quashed for inadequate show-cause; AO must reasonably explain proposed variation.

PRACTITIONER NOTES (NINE AREAS)

(i) E-PORTAL VIGILANCE -- check e-filing portal regularly; faceless notices arrive without physical communication. (ii) RESPONSE DEADLINE -- typical 7-15 days per notice; comprehensive single-response preferred over piecemeal. (iii) DOCUMENTATION -- upload all supporting evidence; no further opportunity once draft order issued. (iv) PERSONAL HEARING REQUEST -- request VC hearing in significant cases (variation > INR 10L typical threshold); preserves due process. (v) DRAFT ORDER REVIEW -- when draft order issued, scrutinise basis; respond to specific items; case law citations. (vi) NATURAL JUSTICE DEFENCE -- if AO fails to provide adequate show-cause / hearing, raise this in CIT(A) appeal -- often successful. (vii) DRP ROUTE -- for TP / international tax cases > INR 10 cr variation, DRP under s. 275 mandatory route. (viii) NFAC vs JURISDICTIONAL AO -- physical AO retains jurisdiction for collection / recovery / search-led / NRI-specific cases. (ix) APPEAL ROUTE -- CIT(A) under s. 357 / NFAC-Appellate (post FA 2020 also faceless); subsequent ITAT direct.

CROSS-REFERENCES

Section 245 -- Faceless jurisdiction framework.
Section 270 -- Assessment (regular flow).
Section 271 -- Best-judgment assessment (faceless flow).
Section 274 -- PCIT reference.
Section 275 -- DRP reference.
Section 286 -- Time limit.
Sections 357-359 -- Appeals to NFAC-Appellate / CIT(A).
CBDT Notification 13-Aug-2020 -- Faceless Assessment Scheme.
CBDT Notification 28-Mar-2022 -- Personal hearing via VC.

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