Faceless Appeal Scheme (FAS)
In 2020, the Government of India introduced the Faceless Appeal Scheme (FAS) to automate tax administration at the I-T commissioners (appeal) level.
Challenges and Issues
- Huge Pendency: As of April 1, 2024, there were 5.5 lakh pending appeals, with over 3 lakh filed more than two years ago.
- Repeat Notices: Taxpayers face repeated requests for written support, yet no notice for a hearing is issued. Virtual hearing requests are often ignored.
- Blockage of Working Capital:
- Taxpayers must deposit 20% of disputed tax demands when filing appeals.
- Delays in resolving appeals financially strain taxpayers, affecting operations, particularly for MSMEs.
- Multiple Appeals: Delays cause tax officers to make similar assessments in subsequent years, escalating disputes and increasing pendency.
Steps Taken
- New Authority: The Finance Act 2023 introduced the joint commissioner of I-T (appeals) (JCIT(A)) to alleviate NFAC/CIT(A) burdens. However, progress has been minimal.
Recommendations
- A specific, mandatory time limit for appeal disposal is suggested, similar to the Dispute Resolution Panel (DRP) mechanism's nine-month timeframe.
- A proposed amendment could set a 15-month limit for NFAC/CIT(A) to resolve appeals.