New IT Rule 14C: EVC not required for Faceless Assessment Scheme

CBDT notifies the Income-tax (27th Amendment) Rules, 2021 to insert new IT Rule 14C, which prescribes that EVC is not required for authentication of electronic records submitted under Faceless Assessment Scheme u/s 144B(7)(i)(b). As per this Rule, where an assessee or any other person submits an electronic record by logging into his registered account in e-filing portal of the Income-tax Department, it shall be deemed that the electronic record has been authenticated under electronic verification code (EVC).

It may be noted that Section 144B(7)(i)(b) on Faceless Assessment provides that an electronic record shall be authenticated by an assessee or any other person, by affixing his digital signature if he is required to furnish his return of income under digital signature, and in any other case, by affixing his digital signature or under electronic verification code in the prescribed manner.

Amended IT Rules provides that electronic records submitted for the purpose of Faceless Assessment through login at e-filing portal of the Income Tax Department shall be treated/ deemed as authenticated submission, as if the same have been submitted using digital signatures (DSC) or electronic verification code (EVC), as may be applicable/ required.

CBDT Income Tax Notification 101/2021 dt. 06/09/2021: Income-tax (27th Amendment) Rules, 2021; new IT Rule 14C inserted (EVC not required for Faceless Assessment Scheme)

CBDT Income Tax Notification 102/2021 dt. 07/09/2021: Corrigendum to Notification 101/2021 dt. 06/09/2021

G.S.R. 616(E).- In exercise of the powers conferred by sub-clause (b) of clause (i) of sub-section (7) of section 144B read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend Income-tax Rules, 1962,
namely:-

1. Short title and commencement.-

(1) These rules may be called the Income-tax (27th Amendment) Rules, 2021.

(2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, after rule 14B, the following rule shall be inserted, namely:–

14C. Prescribed manner of authentication of an electronic record under electronic verification code under sub-clause (b) of clause (i) of sub-section (7) of section 144B.-

For the purposes of sub-clause (b) of clause (i) of sub-section (7) of section 144B, where an assessee or any other person submits an electronic record by logging into his registered account in designated portal of the Income-tax Department, it shall be deemed that the electronic record has been authenticated under electronic verification code.

Explanation.- For the purposes of this rule, ‘designated portal’ shall have the same meaning as assigned to it in in clause (i) of the Explanation below to section 144B.

Note: The principal rules were published vide notification S.O. 969(E), dated the 26/03/1962 and last amended vide notification GSR 612(E), dated the 02/09/2021.

CBDT Press Release dt. 07/09/2021: Income-tax Rules, 1962 Amended to ease authentication of electronic records submitted in faceless assessment proceedings

For easing the process of authentication of electronic records in faceless assessment proceedings, the Government has amended Income-tax Rules, 1962 (‘the Rules’) vide notification no G.S.R. 616(E) dated 06/09/2021. The amended Rules provides that electronic records submitted through registered account of the taxpayers in the Income-tax Department’s portal shall be deemed to have been authenticated by the taxpayer by electronic verification code (EVC). Therefore, where a person submits an electronic record by logging into his registered account in designated portal of the Income-tax Department, it shall be deemed that the electronic record has been authenticated by EVC for the purposes of section 144B(7)(i)(b) of the Income-tax Act, 1961 (‘the Act’).

However, under the existing provisions of section 144B(7)(i)(b) of the Act, this simplified process of authentication by EVC is not available to certain persons (such as companies, tax audit cases, etc.) and they are mandatorily required to authenticate the electronic records by digital signature. In order to provide the benefit of the simplified process of authentication by EVC to these persons, it has been decided to extend the simplified process of authentication by EVC to these persons also.  Hence, the persons who are mandatorily required to authenticate electronic records by digital signature shall be deemed to have authenticated the electronic records when they submit the record through their registered account in the Income-tax Department’s portal. Legislative amendments in this regard shall be proposed in due course.

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