How electronic, jurisdiction-free assessment works under the new Act, the strong body of case law protecting the right to a hearing, and how to navigate the process safely

The Faceless Framework

Section 273 of the Income-tax Act, 2025, corresponding to the erstwhile Section 144B, mandates that regular/scrutiny assessments under Section 270(10), best judgment assessments under Section 271, and reassessments under Section 279 be conducted electronically wherever they fall within the faceless scheme. The stated objectives remain unchanged from the earlier regime — eliminating unnecessary physical interface between taxpayers and tax officers, improving transparency through team-based, randomised case allocation, and building efficiency through technology-driven case management.

How the Process Works

Notices, questionnaires and draft orders are issued electronically through the department's centralised faceless assessment infrastructure, with case allocation to specific units done in a manner designed to prevent any single officer from having sole, identifiable control over a taxpayer's file. Taxpayers respond exclusively through the e-filing portal, and requests for a personal hearing — including through video conferencing — can be made in specified circumstances, particularly where the case involves disputed facts that are difficult to resolve on paper alone.

Cases Outside the Faceless Scheme

Not every case runs through the faceless mechanism. Matters assigned to Central Charges (typically search and seizure related) or International Taxation units, and cases where technical constraints prevent electronic processing or the case cannot be linked to a PAN, continue to be handled outside the faceless framework, following the more traditional jurisdictional process.

A Heavily Litigated Right: The Personal Hearing

Few aspects of the faceless framework have generated as much litigation as the right to a personal hearing once a draft order proposes a variation prejudicial to the assessee. The department has, in a number of cases, argued that the relevant provision is discretionary because it uses the word 'may' rather than 'shall.' High Courts across the country have consistently rejected this reading, holding that once a taxpayer specifically requests a hearing — particularly in a complex or high-value matter — the discretion effectively narrows to an obligation, and failure to grant the hearing renders the resulting order void for breach of natural justice. This body of case law, developed almost entirely under the erstwhile Section 144B, is squarely applicable to Section 273 of the 2025 Act because the underlying statutory design and language have been substantially retained.

Practical Steps for Managing a Faceless Proceeding End-to-End

Beyond the specific right to a personal hearing, taxpayers navigating a faceless proceeding benefit from treating the portal itself as the single source of truth for the entire case. Because there is no physical file and no single named officer to contact informally, every material fact, explanation and piece of evidence needs to exist in a form that a reviewing unit — which may never have handled the case before a particular submission — can independently understand without additional context. This means submissions should generally be self-contained: each reply should briefly restate the query being answered before providing the response, rather than assuming continuity of understanding across different stages of the proceeding.

It is also worth noting that faceless assessment orders, once passed, remain subject to the same appellate and writ remedies discussed elsewhere in this series. A defective faceless order is not somehow more difficult to challenge than a conventional one — if anything, the extensive documented electronic trail the faceless system generates by design often makes it easier to demonstrate precisely where and how the process went wrong, whether that is an unanswered hearing request, an unreasonably compressed response window, or an order passed without genuine consideration of a timely reply.

Relevant Case Laws

Sanjay Aggarwal v. National Faceless Assessment Centre (2021) 127 taxmann.com 637 (Delhi HC) — held that the use of the word 'may' in the provision granting a right to a personal hearing does not absolve the department of its obligation to consider and, in appropriate cases, grant a hearing where one is specifically requested; denial of a requested hearing was held to violate both the mandatory procedure of the faceless scheme and the principles of natural justice.

Umkal Healthcare (P.) Ltd. v. National Faceless Assessment Centre [2021] 131 taxmann.com 325 (Delhi HC) — followed Sanjay Aggarwal and quashed an assessment order passed without affording a personal hearing despite a specific request, reiterating that the discretionary language of the provision cannot be read as absolving the revenue of its statutory obligation once a hearing is sought.

Shree Ganesh Intermediary Private Limited v. National Faceless Assessment Centre (Gujarat HC) — quashed a faceless assessment order where the taxpayer was given only one day to respond to notices, holding that such an inadequate response window itself amounts to a violation of natural justice and procedural fairness, independent of whether a personal hearing was separately sought.

A 2026 Calcutta High Court ruling on the same-day-order practice (₹87 crore faceless assessment matter) — held that passing the final order the same day the assessee's reply is filed constitutes a 'ritualistic formality' rather than genuine consideration, and reaffirmed that CBDT circulars embodying natural justice safeguards remain binding on faceless assessing units even under the current framework.

Bharat Aluminium Company v. Union of India (Delhi HC) — is among the line of cases in which the Delhi High Court has scrutinised whether the faceless assessment machinery genuinely afforded the statutorily contemplated opportunity before a variation prejudicial to the assessee was finalised, reinforcing that courts will look behind the formal structure of the faceless scheme to assess whether the substance of a fair hearing was actually provided in a given case.

Precautions to Be Taken

1.      Check the registered e-filing account and the email/mobile number linked to it regularly — faceless notices are often time-bound and there is no physical reminder or personal visit to fall back on.

2.      Respond only through the official income tax e-filing portal; the faceless scheme does not involve any requirement (or legitimate request) to visit an officer in person or hand over documents physically for a case within its scope.

3.      Explicitly and specifically request a personal hearing through video conferencing wherever the draft order proposes a variation prejudicial to you — the case law confirms this converts a discretionary provision into a practical entitlement.

4.      If you are given an unreasonably short window to respond (as little as a day, in some reported cases), record this fact clearly in your reply and preserve it as a specific ground of challenge.

5.      Be alert to phishing and impersonation — fraudulent emails and calls claiming to be from faceless assessment units are common; always verify any communication and its DIN independently on the official portal before responding or making any payment.

6.      Keep every submission concise, well-indexed and directly responsive to the specific query raised, since faceless officers assess the case purely on the electronic record unless a hearing is specifically requested and granted.

7.      Watch the timing between your reply and the final order — an order passed the same day, or unreasonably soon after, your detailed reply is a recognised ground for challenging the order as lacking genuine application of mind.

8.      Retain PDF copies and download acknowledgments of every notice, submission and order at each stage, since the faceless portal's interface and document retrieval features can change or be time-limited.

9.      If your case is wrongly processed as faceless despite falling within an excluded category (or vice versa), raise this jurisdictional objection at the earliest opportunity rather than after the order is passed.

10.  Draft every reply on the faceless portal as a self-contained document that briefly restates the query before answering it, since the officer reviewing your reply may not be the same one who issued the original query.

11.  If a hearing request or adjournment application appears to have gone unanswered on the portal, follow up in writing and preserve that follow-up, since an unanswered request is itself part of the natural-justice record if the matter is later challenged.

12.  Remember that a faceless order carries exactly the same appellate and writ remedies as a conventional order — do not treat a faceless order as procedurally harder to challenge; if anything, the electronic trail it generates often makes the defect easier to document.

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal,

professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.