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CA Final · Direct Tax Laws & International Taxation · Assessment Procedure

In a faceless assessment of Kavya Pharma Pvt Ltd, the assessment unit wants an enquiry on the genuineness of a large cash creditor. Under the procedure in the Income-tax Rules, 2026, what is the correct course?

The assessment unit makes a request through the National Faceless Assessment Centre, which assigns the enquiry or verification to a verification unit through an automated allocation system. The assessment unit does not contact third parties directly, and the technical unit handles technical matters, not enquiries.

  1. AThe assessment unit directly summons the creditor and records the statement at its own office
  2. BThe assessment unit makes a request through the National Faceless Assessment Centre, which assigns it through an automated allocation system to a verification unitCorrect
  3. CThe assessee is required to appear in person before the verification unit
  4. DThe assessment unit refers the matter to the technical unit, which conducts the enquiry

Explanation

Under Rule 176(2)(d)(ii) and (f), the assessment unit requests enquiry or verification through the NaFAC, which assigns it to a verification unit by automated allocation. The technical unit handles technical matters such as arm's length price or valuation, not enquiries. No personal appearance is required under Rule 176(3)(f).

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