Faceless assessment: how it works and how to handle notices.

Faceless assessment replaced the assessing officer down the corridor with a central electronic process. The platform became operational on 13 August 2020, and the statutory scheme for assessment, section 144B of the 1961 Act, took effect from 1 April 2021. Since 1 April 2026 the law is the Income-tax Act 2025. This explainer covers the mechanics, what the transition changed, and where a company's own discipline decides the outcome.

How the process works

Cases are handled through the National Faceless Assessment Centre, known as NaFAC. Notices come from the centre, not from a named local officer, and everything runs through the taxpayer's account on the e-filing portal, under e-Proceedings.

Behind the centre sit specialised units:

1. Assessment units examine the case and prepare a proposal.
2. Verification units make inquiries and cross-checks.
3. Technical units advise on areas such as valuation and transfer pricing.
4. Review units test a draft for correctness and completeness before an order is made.

Where the assessment unit proposes a variation that is prejudicial to the taxpayer, it issues a show-cause notice, and the taxpayer can respond. A personal hearing can be requested in such cases, and it is conducted only by video conferencing or video telephony through the centre. Responses are filed electronically, with limits on the number and size of attachments.

Not every case is covered. Section 144B applied to the areas, persons and cases the Board specified, and published material on the scheme describes exclusions such as international tax matters and search cases. Check the current scheme for the case in hand.

What changed under the Income-tax Act 2025

The short answer is that the process carried over and the section numbers changed. Three points, from the Act and the CBDT's own transition FAQs, are worth knowing.

• Schemes continue. The FAQs state that section 536(2)(k) treats faceless schemes made under the 1961 Act as made under the corresponding provisions of the new Act.
• Old law governs old years. Under section 536(2)(c), the repealed Act continues to apply to proceedings pending on commencement for tax years beginning before 1 April 2026. A notice in 2026 for an earlier year may still cite 1961 Act sections.
• Scheme-making power. Section 532 of the new Act lets the Central Government frame schemes for the purposes of the Act, including eliminating the interface with the assessee to the extent technologically feasible.

Inquiry powers before assessment now sit in section 268 of the 2025 Act, which includes a requirement to give the taxpayer a hearing on inquiry material before assessment is finalised. Some commentary describes the faceless provisions as now statutory rather than scheme-based. Section numbering and wording should be checked against the Act itself before relying on any secondary summary, including this one.

Where notices still surprise

Faceless does not remove the risks that make notices painful. The following is a general pattern, not measured data.

• Missed portal alerts. Notices arrive on the portal, with email and SMS alerts. If the registered contact is a former employee or an adviser's old address, the deadline runs regardless.
• Short windows. Response dates are set in the notice. Extensions can be requested, but should be sought early and in writing on the portal.
• Thin replies. Nobody at the other end knows the business. A reply that assumes context, or attaches an unindexed bundle, tends to draw a second notice.
• Mismatches. Differences between the return, books, tax audit report and third-party data are what usually prompt a query.

CBDT Circular 19/2019 also requires a computer-generated Document Identification Number on communications. A notice or order without one is worth raising with an adviser.

What to do with this

These are considerations, not advice.

1. Own the inbox. Keep the portal-registered email and mobile current, and assign a named person to check e-Proceedings regularly.
2. Log every notice on day one. Record the section cited, the year, the DIN and the due date, and note which Act applies.
3. Build the file before the notice. Keep reconciliations of return to books to tax audit report, and support for material claims and related-party pricing.
4. Write for a stranger. Reply in short numbered points, index the annexures, and explain the business in two lines.
5. Use the hearing. If a variation is proposed, consider asking for a video hearing rather than relying only on the written reply.
6. Confirm the current rules. As of September 2026, verify the applicable scheme, exclusions and time limits with the department's notifications.

Nothing here is tax or legal advice. Facts and dates differ from case to case.