Advanced Direct Tax Laws and Practice · Assessment

Procedure and Notices in Faceless Assessment

Updated 11 October 2026 · Fact-checked

Faceless assessment under section 273 of the Income-tax Act, 2025 is assessment done electronically through the National Faceless Assessment Centre (NaFAC). NaFAC allots the case to an assessment unit, serves notices, and passes all communication by electronic mode. The assessment unit passes a written order after hearing you.

Understand Procedure and Notices in Faceless Assessment

Faceless assessment removes direct contact between the assessee and the Assessing Officer. You deal only with the National Faceless Assessment Centre (NaFAC). It is the single channel for notices, replies and documents.

Section 273(1) says assessment, reassessment or recomputation under section 270(10), 271 or 279 is made in a faceless manner, as per the prescribed procedure. Under section 273(2), the Board specifies the territorial areas, persons, incomes or cases covered. So the scheme applies only where the Board has said so.

The work is split among units that the Board may set up under section 273(3). The assessment unit analyses material, identifies issues, seeks clarification and makes the assessment. The verification unit does enquiry, cross verification, examination of books and witnesses, and recording of statements. The technical unit gives technical advice on legal, accounting, forensic, IT, valuation, transfer pricing, data analytics or management matters. The review unit checks a variation proposed by the assessment unit, where NaFAC considers review necessary.

NaFAC itself assigns the case to an assessment unit, tells you the assessment will be faceless, serves notice under section 268(1) or 270(8), and forwards your response to the assessment unit. Under section 273(4)(b), the assessment unit makes the assessment of total income or loss by a written order, after considering all relevant material and giving you an opportunity of being heard. It may also start penalty proceedings and determine the sum payable or refund due.

Communication is electronic. Under section 273(7), communication among units, or with you or any other person, goes through NaFAC. Communication between NaFAC and you, or your authorised representative, is exclusively electronic. The exception in section 273(8) is enquiry or verification by the verification unit in circumstances specified by the Board. Section 273(13) defines faceless assessment as proceedings conducted electronically through the e-Proceeding facility in your registered account on the designated portal.

Key rules to remember

Scope of faceless assessment: Section 273(1)-(2): assessment, reassessment or recomputation under section 270(10), 271 or 279, for cases specified by the Board; The Board decides the areas, persons, incomes or cases covered.
Units under section 273(3): NaFAC + assessment units + verification units + technical units + review units; The Board sets them up and specifies functions and jurisdiction. Each unit is an Assessing Officer with powers assigned by the Board (section 273(5)).
Who staffs the units: Section 273(6): Additional/Joint Commissioner or Director; Deputy/Assistant Commissioner or Director or Income-tax Officer; other authority, staff or consultant the Board considers necessary; Use this for 'authorities' questions.
Assessment order: Section 273(4)(b): written order + all relevant material + opportunity of being heard; The assessment unit may also initiate penalty proceedings and determine sum payable or refund.
Electronic communication: Section 273(7): via NaFAC; with assessee exclusively by electronic mode; Exception in section 273(8): enquiry or verification by the verification unit in circumstances the Board specifies.
Transfer to jurisdictional officer: Section 273(12): NaFAC head may transfer the case at any stage, with prior Board approval; Section 273(9)-(11) deal with references for section 268(5) and what follows.
Reassessment notices: Section 279(3): for sections 280 and 281, 'Assessing Officer' excludes NaFAC and any assessment unit under section 273(3); Inserted w.e.f. 1-4-2026. Show-cause notice and approval stages are handled by the jurisdictional Assessing Officer.

How to solve Procedure and Notices in Faceless Assessment questions

Use this order for any case-based question on faceless assessment procedure.

1Check whether the case falls in faceless assessment: the Board must have specified the area, person, income or case under section 273(2), and the proceeding must be under section 270(10), 271 or 279.
2Identify the stage in the facts: allotment, notice, response, verification, technical help, review, or final order.
3Name the unit that acts at that stage and state its function under section 273(3).
4Check the mode of communication: through NaFAC and electronic, unless the section 273(8) exception applies.
5Check whether a hearing opportunity was given before the written order under section 273(4)(b).
6Check special routes: reference for section 268(5), transfer under section 273(12), or reassessment where section 279(3) applies.
7Write the conclusion: whether the procedure was followed, and what you advise the assessee to do (reply through the portal, keep documents ready, represent through an authorised representative).

Quickest way: Unit-by-function matching

When to use it: Use when the question lists activities and asks which unit or authority performs them.

Notice and receipt of reply: NaFAC.
Analysis, issue identification, clarification, variation and final order: assessment unit.
Enquiry, cross verification, witnesses, statements: verification unit.
Expert advice such as valuation or transfer pricing: technical unit.
Check of proposed variation: review unit.
Add one line on electronic mode via NaFAC and the section 273(8) exception.

Common mistakes in Procedure and Notices in Faceless Assessment

Saying the assessment unit directly writes to the assessee.
Students assume the officer who assesses also communicates.
Fix: Under section 273(7), communication goes through NaFAC, which forwards your response to the assessment unit.
Treating all assessments as faceless.
The scheme name suggests universal coverage.
Fix: Section 273(2) limits it to what the Board specifies. State this condition.
Mixing up verification unit and technical unit.
Both assist the assessment unit.
Fix: Verification unit: enquiry, cross verification, witnesses. Technical unit: expert advice.
Saying the review unit reviews every case.
Students ignore the condition in the text.
Fix: Review is of a variation proposed by the assessment unit, wherever NaFAC considers it necessary.
Saying all communication is always electronic.
Missing the exception.
Fix: Section 273(8) excludes enquiry or verification by the verification unit in circumstances the Board specifies.
Assuming NaFAC or the assessment unit issues the show-cause notice before reassessment.
Section 273 is read in isolation.
Fix: Section 279(3) says 'Assessing Officer' for sections 280 and 281 excludes NaFAC and assessment units. Section 281 requires a show-cause notice with the information, and an order with prior approval of the specified authority.

Worked examples

Example 1

A company's case is selected for faceless assessment. Explain the role of each unit and how notices reach the company.

Show the solution

The Board must have specified the case under section 273(2). NaFAC then assigns it to an assessment unit and intimates the company that assessment will be faceless.
NaFAC serves the notice under section 268(1) or 270(8) and forwards the company's reply to the assessment unit.
The assessment unit analyses the material, identifies issues, seeks clarification and may propose a variation prejudicial to the company.
The verification unit may do enquiry or cross verification. The technical unit may advise on valuation or transfer pricing.
If NaFAC considers it necessary, the review unit checks that material evidence is on record and relevant issues are covered.
All communication with the company is through NaFAC, exclusively by electronic mode, via its registered account on the designated portal.

Answer: NaFAC is the sole channel. The assessment unit assesses. The verification, technical and review units assist. The company receives and answers notices electronically through NaFAC.

Example 2

The assessment unit of a faceless case completes the assessment without giving the assessee any chance to be heard. Is the order valid under section 273? Also, can the assessment unit issue the section 281 show-cause notice in a reassessment?

Show the solution

Section 273(4)(b)(i) requires a written order after considering all relevant material and after giving the assessee an opportunity of being heard.
If no opportunity was given, the mandatory condition is not met, so the order is open to challenge.
For reassessment under section 279, section 281(1) requires a show-cause notice to the assessee before notice under section 280, accompanied by the information that suggests escapement (section 281(2)).
Section 279(3) says 'Assessing Officer' for sections 280 and 281 means an officer other than NaFAC or an assessment unit under section 273(3).
So the assessment unit cannot issue it. The jurisdictional Assessing Officer does, and passes the order with the specified authority's prior approval under section 281(3).

Answer: The order is vulnerable because the hearing opportunity was not given. The section 281 show-cause notice is issued by the jurisdictional Assessing Officer, not by the assessment unit or NaFAC.

Exam tips

Quote section numbers like 273(3), 273(7) and 273(8) in short phrases. They earn marks without lengthy copying.
In case questions, name the stage first, then the unit, then the conclusion.
Always mention the hearing opportunity under section 273(4)(b) when the facts talk about an order.
Do not state time limits for replies unless the question gives them. They are set in the notice and the prescribed procedure.
For practical drafting, mention filing the reply through the registered account on the designated portal and keeping an acknowledgement.

Practice questions from Assessment

Procedure and Notices in Faceless Assessment in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Procedure and Notices in Faceless Assessment: frequently asked questions

Who do I reply to in a faceless assessment notice?

You reply to NaFAC through your registered account on the designated portal. NaFAC forwards your response to the assessment unit. Reply within the period stated in the notice.

What is the difference between the assessment, verification, technical and review units?

The assessment unit makes the assessment. The verification unit does enquiry and cross verification. The technical unit gives expert advice. The review unit checks a proposed variation where NaFAC considers it necessary.

Can a faceless case be moved to a regular Assessing Officer?

Yes. Under section 273(12), the NaFAC head may transfer the case to the jurisdictional Assessing Officer at any stage, with prior approval of the Board. A reference for section 268(5) is also possible under section 273(9).

Is all communication in faceless assessment electronic?

Communication between NaFAC and you is exclusively electronic. The exception is enquiry or verification by the verification unit in circumstances the Board specifies under section 273(8).