CBDT notified amendment in Faceless penalty scheme, allowing mandatory personal hearing

The Central Board of Direct Taxes (CBDT) has notified the amendment in the faceless penalty scheme, allowing mandatory personal hearing through electronic mode to any taxpayer who has sought a hearing.

The amendment has omitted the Regional Faceless Penalty Centre from the Faceless Penalty Scheme and provides that electronic records shall be authenticated by the National Faceless Penalty Centre and even hearing should be done via them and not regional faceless penalty centre.

The Faceless Penalty (Amendment) Scheme, 2022, notified on Friday says that such hearing will be held exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony.


The amendment says that cases where a request for personal hearing has been received, the income-tax authority of the relevant unit shall allow such a hearing through the National Faceless Penalty Centre and not regional faceless authority centres.

Even the processing of penalty or dropping of penalty will be done via national faceless penalty centre and not regional faceless penalty centre.

The notification gives effect to the changes proposed in the Finance Act 2022 to section 144B of the Income Tax Act, as per the order.

Earlier granting personal hearing was at the discretion of senior officials.

The move came after a series of litigation where the court had quashed Income Tax Notices and Assessment Order for not granting personal hearing to taxpayers. This caused difficulty for both taxpayers and the tax officials, leading to series of court cases challenging assessment order and thus delaying the process.

Earlier, in December 2021, the tax authority had granted a personal hearing as a right to taxpayers in the case of the faceless appeal scheme.

After receiving feedback, the centre had proposed several changes to the faceless penalty scheme in the union budget this year through these amendments.