TMI BlogStandard Operating Procedure (SOP) for Assessment Unit (AU), Verification Unit (VU), Technical Unit (TU) and Review Unit (RU) under the Faceless Assessment provisions of Section 144B of the Income-tax ActX X X X Extracts X X X X X X X X Extracts X X X X ..... plementation of the SOPs if any practical difficulty or conflict with the statute is noticed, then the provisions of Statute shall prevail. 4. These SOPs are strictly for departmental use only. 5. This is issued with the prior approval of the CBDT. Enclosed: As above. Yours faithfully, (Ashish Abrol) Commissioner of Income-tax-1, National Faceless Assessment Centre, Delhi Standard Operating Procedure (SOP) under the Faceless Assessment provisions of Section 144B of the Income-tax Act Index of contents S no Heading/Sub-heading Page no SOP Assessment Unit A Assignment of cases 1 B Preliminary Examination and Action 1 C Initial Questionnaire u/s 142(1) 2 D Process for issuance of notice u/s 142(1) 3 E Grant of adjournment to notice u/s 142(1) on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 SOP Technical Unit 20 A Scope of Technical Assistance 20 B Seeking clarification from AU 21 C Tools for facilitating Technical Assistance 21 D Procedure for Handling and Forwarding References by TU 21 E Procedure for Rendering Technical assistance on Legal References 22 F Procedure for Rendering Technical assistance on TP References 23 G Procedure for Rendering Technical assistance on References for Valuation of Property / Asset/ Investment etc. 23 H Procedure for Rendering Technical assistance on reference involving information relating to agreement entered under Section 90 or 90A 24 I Procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re u/s 142(1) shall be, preferably, issued by AU within 15 days of as signment of cases. C.2 Before issuing the initial Questionnaire, AU shall: C.2.1 Consider all internal data bases of the Department 360 degree in ITBA, Insight, E-filing AO Portal available to the AU; C.2.2 Consider Structured questions, if available, and Guidance notes for each issue/scenario maintained by Insight, on the points of enquiry; C.2.3 Structured questions, if available, on the points of enquiry may be modified, as required; C.2.4 In Reopened cases The initial questionnaire shall seek specific information/ evidence on the grounds that led to reopening; C.2.5 In Set aside cases The initial questionnaire shall seek specific information/ evidence on the grounds that led to the case being set-aside; C.2.6 In Compulsory scrutiny cases The initial questionnaire shall seek specific information arising from the return of income or information available on record that led to the case being under compulsory scrutiny. C.3 Due care may be taken to ensure: C.3.1 Assessee is not asked to submit documents / information already filed by the Assessee and available o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be granted by the AU, if required. F. Analysis of Information submitted in response to questionnaire u/s 142(1) and Issue of Additional Questionnaire F.1 Examine reply of the assessee with reference to the issue involved in the case; and F.2 Cross-verify reply of the assessee with the information available to the AU; F.3 AU will decide, generally within 10 days of receipt of reply, F.3.1 Whether reference to VU / TU is required; F.3.2 Where the assessee contests or gives information at variance with that available with the AU, such information/ data may be re-verified through: F.3.2.1 Insight in case of SFT data, Financial Institutions and Government Agencies, F.3.2.2 ITBA- in other cases; F.3.3 Whether additional questionnaire u/s 142(1) is required to be issued to obtain further information/ clarification. G. Non-compliance of notice u/s 142(1) G.1 Initiation of penalty under Section 272A or under Section 271(1)(b) G.1.1 Penalty may be initiated in cases of non-compliance of notice u/s 142(1). G.1.2 Penalty may not be initiated where returned Income is proposed to be accepted on the basis of material alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt assessment in Non-Responsive case is demonstrably reasonable, the AU shall ensure that all the details referred in Para G.3.3 above are included in the final order. H.6 Order under Section 144 read with Section 144B is to be passed by AU, based on material available on record, with estimation of income in accordance with law. I. Enquiry/Verification by AU in Faceless mode only Functions of AU include: 1.1 Enquiry, 1.2 Cross Verification, 1.3 Examination of books of account, 1.4 Examination of witnesses and recording of statements, 1.5 Such other functions as may be required for the purposes of making faceless assessment. J. Reference to Verification Unit (VU) J.1 AU may, if required, make reference to VU in following instances: J.1.1 Non availability of digital footprint of any other person ; J.1.2 Electronic/ online verification is not possible on account of no response by any other person to notice issued by AU; J.1.3 Physical verification is required, regardless of the presence of digital footprint. J.2 Prior to making reference, reasons must be recorded in writing in case history noting on ITBA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess Pin code, following the procedure as per this Para. L. Reference to Technical Unit (TU) L.1 AU may seek assistance of TU on matters provided in Section 144B(1)(iv)(c) and Section 144B(3)(iv). L.2 Reference shall be made in prescribed formats (Annexure AU-3,4,5,6). L.3 Prior to seeking Legal Assistance, AU must: L.3.1 Refer to the guidance note on ITBA homepage; L.3.2 Take care that Legal issues already covered by decision of jurisdictional High Court or Supreme Court are not referred to TU; L.3.3 Obtain approval of PCIT of the AU; L.4 In other Technical references, approval of PCIT of the AU shall be obtained as per the requirement in law. L.5 Timeline for making reference to TU should generally be made: L.5.1 Where requisite information is received from assessee/third party within 10 days of receipt. L.5.2 Where requisite information is already available (for reference to TPO etc)-within 15 days from the date of allocation of case. M. Reference to NaFAC for Special Audit under Section 144B(7) M.1. Following process is to be followed: M.1.1 The opinion, that the case requires audit by special auditor, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Response time of 7 days from the issue of SCN. N.1.3.2 Response time of 7 days may be curtailed, keeping in view the limitation date for completing the assessment. N.2 Personal Hearing against SCN N.2.1 Wherever personal hearing is sought by the assessee through the button on the e-filing portal, AU shall accord personal hearing to the assessee through Video Conferencing (VC) facility. N.2.2 To ensure adherence to the principles of natural justice and reasonable opportunity to the assessee, VC must be given within 2-3 days of request by the assessee. N.3 Income Loss Determination Proposal (ILDP) N.3.1 ILDP is to be prepared in all cases, containing all the essential ingredients of the assessment order. N.3.2 In cases involving variation prejudicial to the assessee, ILDP shall be prepared after completion of the process of SCN and or VC, if any. N.3.3 In cases involving variation prejudicial to the assessee, it must be ensured that the ILDP is prepared after considering: N.3.3.1 Reply of the assessee in response to the SCN; and N.3.3.2 Submissions made by the assessee in personal hearing through Video Conference, if any. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2 Upon receipt of communication, about no objection having been received from the assessee within the specified time under Section 144C(2), AU shall: N.6.2.2.1 Capture the fact in ITBA; N.6.2.2.2 Initiate all relevant penalty proceedings on the ITBA, where applicable, and; N.6.2.2.3 Pass final order as per provisions of Section 144C within 3 days of communication. N.6.2.3 Upon receipt of communication, about filing of objection by the assessee (along with copy of objections filed before DRP) within the specified time u/s 144C(2), AU shall: N.6.2.3.1 Capture the response in ITBA within 3 days of receipt of communication; N.6.2.3.2 Upon receipt of Directions of DRP, initiate all relevant penalty proceedings on the ITBA, where applicable, and; N.6.2.3.4 Pass final assessment order in conformity to DRP directions within 3 days of communication of Directions of DRP. O. Passing of Final Assessment Order O.1 The final Assessment Order, using the prescribed format (Annexure AU-9), must include the following: O.1.1 Complete description of the issues involved; O.1.2 Details of dates of all notices/opportunities given including the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne the case records of the relevant PAN/AY. S.1.2 Where grant of refund is likely to adversely affect revenue: S.1.2.1 Record reasons in writing; S.1.2.2 Obtain approval of PCIT of the AU (to be given within 7 days); and S.1.2.3 Communicate the same to JAO, through issue letter functionality 241A dropdown in ITBA. S.1.3 Where grant of refund is not likely to adversely affect revenue, communicate the same to JAO through issue letter functionality -241A dropdown in ITBA. S.1.4 The power to withhold refund till the date of assessment, vests with the Jurisdictional Assessing Officer. S.2 Process with reference to Sec 281B of the Act: S.2.1 Where AU is of the opinion that it is necessary for the purpose of protecting the interest of the Revenue, it shall: 5.2.1.1 Record reasons for provisional attachment in writing; S.2.1.2 Submit such proposal to PCIT of the AU; S.2.1.3 Obtain approval of PCIT of the AU (to be given within 7 days); S.2.1.4 Pass an order in writing; S.2.2 Communicate to JAO, through ITBA, to give effect to the order of attachment. Government of India Ministry of Finance Central Board of D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itutions etc. D. Procedure for Handling References received from AU D.1 On receipt of reference from AU, the VU shall: D.1.1 Examine the reference to ensure it is: D.1.1.1 Complete and contains requisite documents, D.1.1.2 Has approval of PCIT of the AU, in case of references falling under Para 13.2 and B.3; D.1.2 Seek clarification through inter unit communication functionality in case of any deficiency; D.1.3 Clarification must be sought within 2-3 days of receipt of reference; D.1.4 Carry out the verification requested; D.1.5 In case of physical verification or service of notice/ summons: D.1.5.1 Where any new address is found, VU shall conduct verification at the new address if it is in physical proximity of the VU, D.1.5.2 Where the new address is not in physical proximity of the VU, the VU may close the verification after reference to the proximate VU for physical verification; D.1.6 Prepare a Verification Report as per format, along with Case History Details of Verification proceedings and any other findings, generally within 2-3 days of completion/ closure of verification; D.1.7 Forward the Verification Repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act. A. Scope of Technical Assistance: A.1 As per Section 144B (1)(iv)(c) -technical assistance sought by AU on matters related to: A.1.1 Determination of Arm s Length Price A.1.2 Valuation of Property A.1.3 Withdrawal of Registration, Approval, Exemption A.1.4 Any other Technical Matter A.2 As per Section 144B (3)(iv)-providing technical assistance in: A.2.1 Legal Matters A.2.2 Accounting A.2.3 Forensic A.2.4 Information Technology A.2.5 Valuation A.2.6 Transfer Pricing A.2.7 Data Analytics A.2.8 Management A.2.9 Agreement entered into under Sec 90 or 90A A.2.10 Any other Technical Matter B. Seeking clarification from AU B.1 TU may seek clarification from AU as per prescribed format. (Annexure TU-1) B.2 Clarification if required, must be sought within 2-3 days of receipt of reference. C. Tools for facilitating Technical Assistance C.1 TU may view case records through status Monitor; C.2 TU shall take assistance of all resources available including Knowledge Management Portal, Insight, Public domain, CMIE, MCA, other databases; C.3 TU must monitor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curtailed keeping in view the time barring date of the case. E.3.4 After submission of Report to the AU, interpretation arrived by the PCIT of the TU and his team, along with the facts and circumstances and reasoning, shall be forwarded to NaFAC for compilation of Guidance Notes. F. Procedure for Rendering Technical assistance on TP References F.1 TP References may refer to: F.1.1 International transaction disclosed in form 3CEB by the assessee; F.1.2 International transaction(s) not disclosed by the assessee; F.1.3 Specified domestic transaction disclosed by the assessee; F.1.4 Specified domestic transaction not disclosed by the assessee; F.1.5 Where the case is selected on the basis of CbCR data. F.2 On receipt of reference from AU, for determination of ALP by TPO, TU must ensure: F.2.1 Reference is complete and contains the requisite documents; F.2.2 Reference has the approval of PCIT of the AU as per the prescribed format. (Annexure TU-2) F.3 Forwarding of reference to TPO shall be made as per Para D.3 within 2-3 days of re ceipt/ clarification. F.4 TP order under Section 92CA(3) shall be forwarded to the concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 1.1 On receipt from AU, TU must ensure that Reference is complete and contains the req uisite documents as per prescribed format. (Annexure) 1.2 Reference to concerned Approving Authority shall be made as per Para D.4 within 2-3 days of receipt/ clarification. 1.3 Where reference was made under proviso to Section 143(3) [refer to J.5.1 of SOP for AU], the decision of the Approving Authority shall be forwarded within 1-2 days of its receipt. J. Procedure for handling any other Technical References including Accounting, Forensic, Information Technology, Data Analytics, Translation of documents: J.1 On receipt from AU, TU must ensure that Reference is complete and contains the req uisite documents. J.2 Reference to the concerned resource person shall be made as per Para D.4 within 2-3 days of receipt/ clarification. J.3 Report from the resource person shall be forwarded within 1-2 days of receipt to the AU. J.6 TU must follow up with resource person to monitor timely submission of report. J.7 TU must maintain and update database/panel of resource persons. J.8 Payment to the resource persons, wherever applicable, shall be made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Formats for Assessment Unit (I) 1 Format of Communication to be issued through Issue letter functionality to all available mails of assessee in case of non-compliance of Initial notice u/s 142(1) SOP D.3.1 (I) 2 Format for reference to Verification Unit through Insight SOP G.J.4 (II) 3 Format for reference to Technical Unit through ITBA for assistance/advice on legal issue SOP Para L (III) 4. Format for reference to Technical Unit through ITBA for assistance/advice on Transfer Pricing adjustment SOP Para L (V) 5. Format for reference to Technical Unit through ITBA for assistance for valuation SOP Para L (VI) 6. Format for making reference to TU for withdrawal of Approval, Registration, Exemption, etc by Approving Authority SOP Para L (VIII) 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brief description of enquiry/verification proposed to be assigned to designated VU by AU Verification proposed to be done in physical enquiry Justification for physical enquiry as to how they fall in Para J of SOP for AU. Date and time of email by which approval of PCIT AU taken Yours faithfully, Assessment Unit, Income Tax Department (Kindly attach relevant documents with the reference) **Each reference should have one pin-code enquiry only. Kindly enter correct pin-code while making reference. *** Kindly read Insight QRG for Verification reference for further information. AU-3 Format for reference to Technical Unit through ITBA for assistance/advice on legal issue SOP Para L To, The Technical Unit, PAN: Name of the assessee : Assessment Year: Date: Sub : Reference for assistance/advice on legal issue Madam/Sir, Kindly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... faithfully, Assessment Unit, AU-4 Format for reference to Technical Unit through ITBA for assistance for Valuation- SOP Para L To, The Technical Unit, PAN: Name of the assessee : Assessment Year: Date: Sub : Reference for assistance for Valuation Madam/Sir, Kindly refer to the above subject. Your assistance is being sought for valuation as detailed hereunder: 2. Valuation reference : 1 Section under which valuation is sought 2 Details of the property/investment/asset along share of assesse therein, with supporting documents. Free text attachment options 3 Location of the property State- District- Mohalla-Pin code 4 Value declared by assessee Copy of valuation report submitted by the assessee to be attached, if any. Free text attachment options 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed to the extent feasible. 1. Details of opportunities given: Type of notice /communication Date of notice/co mmunication Date of compliance given Response of the assessee received/n of received Date of response if received Response type (Full/part/ adjournment) Remarks if any. 2. Variation proposed 2.1 Complete description of issues involved (issue wise) 2.2 Synopsis of all submissions of the assessee relating to the issue and indicating the dates of submission. 2.3 Summary of information/evidence collected which proposed to be used against it attach documents if required) 2.4 Variation proposed on the basis of inference drawn ( specify the basis of inference and quantify the variation proposed, if possible) (Compliance date should give adequate opportunity and Personal hearing through VC is mandatory, if asked in response to SCN) AU-8 Format for ILDP SO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Income as computed u/s143(1)(a) 3 Variation in respect of issue of (if any) 4 Variation in respect of issue of (if any) 5 Total Income/Loss determined as per the above proposal AU-9 Format for Final Assessment Order SOP O.1 The format is fixed in ITBA and for giving the details of variation space for free text has been provided. In the space of free text- the following format may be used to the extent feasible. 1 Facts of the case in brief 2 Details of opportunities given: Type of notice/comm unication Date of notice/co mmunication Date of compliance given Response of the assessee received/not received Date of response if received Response type (Full /part /adjournment) Remarks if any. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TU B.1 To, The Assessment Unit, Sub : Clarification from AU Madam/Sir, Kindly refer to the above subject. Your assistance/advice is being sought on legal issue(s) as detailed hereunder Format for seeking clarification from AU 1. Clarification in respect of question number XXX 2. Description of clarification sought ...................................... 3. Brief reasons for seeking clarification .................................. .................................. 4. Whether clarification is on facts or on application of any particular case law ................................ ................................ 5. Any other remarks ............................... Yours faithfully, Technical Unit, Income Tax Department TU-2 Format for TP reference received after approval of PCIT of AU SOP TU F.2.2 To, The Technical Unit, PAN: Name of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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