Section 273 · Assessment
Section 273 of the Income-tax Act, 2025 — Faceless Assessment (NFAC, Units & Procedure)
By CA Rajat Agrawal
Updated 05 Jul 2026
Chapter XVI
📜 What the law says — Section 273, Income-tax Act 2025
273. (1) Irrespective of anything to the contrary contained in any other provision of
this Act, the assessment, reassessment or recomputation under section 270(10)
or 271 or 279, as the case may be, with respect to the cases referred to in sub-section
(2), shall be made in a faceless manner as per such procedure, as may be prescribed
in this behalf.
(2) The faceless assessment under sub-section (1) shall be made in respect of such
territorial area, or persons or class of persons, or incomes or class of incomes, or
cases or class of cases, as may be specified by the Board.
(3) The Board may, for the purposes of faceless assessment, set up the following
Centre and Units and specify their functions and jurisdiction:—
(a) a National Faceless Assessment Centre to facilitate the conduct of faceless
assessment proceedings in a centralised manner including assigning the
case selected for the purposes of faceless assessment under this section
to a specific assessment unit, intimating the assessee that assessment
in his case shall be completed in accordance with the provision of this
section, serving a notice to the assessee under section 268(1) or 270(8),
and forwarding any response of the assessee to the assessment unit;
(b) such assessment units, as it may deem necessary to conduct the face-
less assessment, to perform the function of making assessment, which
includes analysis of the material furnished by the assessee or any other
person, identification of points or issues material for the determination
of any liability (including refund) under this Act, seeking information
or clarification on points or issues so identified, determination of any
variation prejudicial to the assessee, and such other functions as may
be required for the purposes of making faceless assessment;
(c) such verification units, as it may deem necessary to facilitate the conduct
of faceless assessment, to perform the function of verification, which
includes enquiry, cross verification, examination of books of account,
examination of witnesses and recording of statements, and such other
functions as may be required for the purposes of verification;
(d) such technical units, as it may deem necessary to facilitate the conduct
of faceless assessment, to perform the
In plain language
What Section 273 actually deals with
Section 273 of the Income-tax Act, 2025 is the "Faceless Assessment" provision. It is the successor to Section 144B of the Income-tax Act, 1961. In plain words, it says that scrutiny assessments, best-judgment assessments, reassessments and recomputations will be carried out electronically, through a centralised system, without you ever meeting the officer face to face. There is no local Income-tax Office to visit and no single "your ward" officer who both questions you and decides your case. The whole thing runs online through the National Faceless Assessment Centre (NFAC).
The purpose is transparency and efficiency: cases are allotted at random by computer, no taxpayer knows which officer is looking at the file, and no officer knows whose file it is. This is meant to remove personal contact, discretion and the scope for harassment or corruption.
Which assessments become faceless
- Scrutiny assessment — under Section 270(10) (equivalent to the old Section 143(3)).
- Best judgment / recomputation — under Section 271 (old Section 144).
- Income-escaping assessment (reassessment) — under Section 279 (old Sections 147/148).
So almost every "notice and scrutiny" style proceeding a normal taxpayer might face now flows through the faceless machinery unless the Board specifically pulls it out.
Who runs it — the four Units and the NFAC
- National Faceless Assessment Centre (NFAC): the single point of contact. Every notice, question and reply passes through the NFAC. You only ever "talk" to the NFAC, never directly to any officer.
- Assessment Unit (AU): the brain. It analyses your return and documents, identifies the issues, asks for information, and proposes any addition or variation to your income.
- Verification Unit (VU): does enquiry, cross-verification, examination of books of account, examination of witnesses and recording of statements.
- Technical Unit (TU): gives specialist help — legal, accounting, forensic, IT, valuation, transfer pricing, data analytics.
- Review Unit (RU): checks the draft order proposed by the Assessment Unit to make sure the facts, law and evidence are properly applied before it is finalised.
How the procedure works, step by step
- The NFAC assigns your case to an Assessment Unit through an automated allocation system (random computer allotment).
- The NFAC serves you a notice; you file your reply online through your registered account on the designated portal.
- The AU may route requests through the NFAC to the Verification or Technical Unit.
- The AU prepares an income determination proposal / draft order. If it proposes a variation prejudicial to you, you generally get a show-cause notice and an opportunity to respond before it is finalised.
- The draft may go to a Review Unit; the final order and demand/refund are issued by the NFAC.
Key conditions and safeguards
- All communication is exclusively by electronic mode between the NFAC and you (or your authorised representative). Verification activities specified by the Board are an exception.
- The officers manning the units are Additional/Joint Commissioners, Deputy/Assistant Commissioners and Income-tax Officers, supported by staff and consultants as the Board decides.
- Personal hearing is available only through video conferencing — you cannot demand an in-person meeting.
- The Board can transfer a case to the jurisdictional Assessing Officer at any stage (for example, complex cases needing invocation of special powers). This is a safety valve, not the norm.
Practical implications for a normal taxpayer
- Keep your e-filing account, registered email and mobile number active — every notice lands there and deadlines run from electronic service.
- Reply completely and on time; there is no walking into an office to "explain later". A missed response can lead to a best-judgment assessment under Section 271.
- Upload clean, indexed documents. The Assessment Unit only sees what you upload — there is no informal conversation to fill gaps.
- Because the process is faceless, quality of written submissions matters more than personal relationships.
Note: the detailed step-by-step machinery is being notified through the Income-tax Rules (draft Rule 176 prescribes the procedure under Section 273(1)); readers should check the final notified rules for exact timelines.
💡 Example
Worked example 1 — a scrutiny under Section 270(10). Mr. Sharma, a Jaipur consultant, files his return showing income of ₹18,00,000. His case is picked for scrutiny. Under Section 273, the NFAC randomly assigns it to an Assessment Unit (the officer's identity and location are unknown to Mr. Sharma). The AU notices ₹4,00,000 of unexplained bank credits and issues, through the NFAC, a notice seeking proof. Mr. Sharma uploads bank statements and loan confirmations via his registered account. The AU accepts ₹3,00,000 but proposes to add ₹1,00,000. It issues a show-cause notice; Mr. Sharma responds online. The final order assesses income at ₹19,00,000. At no point did he visit an office or meet the officer.
Worked example 2 — no response leads to best judgment. Ms. Iyer ignores three faceless notices. Because she never replied, the Assessment Unit has nothing to verify, and the case is completed as a best-judgment assessment under Section 271 — the officer estimates her income at ₹12,00,000 against the ₹7,00,000 she had declared, and raises tax and interest on the higher figure. Had she simply uploaded her documents on time, the addition could have been avoided.
A relatable story. Earlier, taxpayers dreaded the "call from the ward office" and the long queues with a file under the arm. A small trader in Kota used to take a day off, travel to the department, and wait for hours to explain a mismatch. Under Section 273's faceless system, the same mismatch now arrives as an e-notice; he uploads his purchase bills from his shop at 10 pm, and the matter is decided by an officer he will never meet, sitting in a city he will never know. Less travel, less fear of "setting", but far more responsibility to respond well in writing and on time.
| Aspect | Old law — Section 144B, IT Act 1961 | New law — Section 273, IT Act 2025 (w.e.f. 1 Apr 2026) |
|---|
| Nature | Faceless assessment framework | Faceless assessment — codified and consolidated |
| Coordinating body | National Faceless Assessment Centre (NFAC) | National Faceless Assessment Centre (NFAC) |
| Units | Assessment, Verification, Technical, Review | Assessment, Verification, Technical, Review |
| Assessments covered | 143(3), 144, 147 | 270(10) scrutiny, 271 best judgment/recomputation, 279 reassessment |
| Case allotment | Automated random allocation | Automated allocation system |
| Communication | Electronic mode only, via NFAC | Exclusively electronic, via NFAC (verification excepted) |
| Personal hearing | Video conferencing only | Video conferencing only |
| Transfer to jurisdictional AO | Permitted with approval | Permitted with Board approval at any stage |
Related sections
Section 270 — Assessment (processing and scrutiny) Section 271 — Best judgment assessment Section 279 — Income escaping assessment (reassessment) Section 280 — Notice for income escaping assessment Section 268 — Jurisdiction and powers of Assessing Officers Section 274 — Faceless proceedings before appellate/other authorities
Frequently asked questions
What does Section 273 of the Income-tax Act, 2025 deal with?
It deals with faceless assessment — conducting scrutiny, best-judgment and reassessment proceedings electronically through the National Faceless Assessment Centre, with no face-to-face contact between the taxpayer and the officer. It is the successor to Section 144B of the 1961 Act.
Which assessments are covered under Section 273?
Scrutiny assessments under Section 270(10), best-judgment assessments and recomputations under Section 271, and income-escaping reassessments under Section 279 are conducted faceless, unless the Board specifically transfers a case to a jurisdictional officer.
Can I meet the assessing officer in person?
No. All communication is exclusively electronic through the NFAC, and you do not know which officer is handling your case. If a personal hearing is allowed, it is only through video conferencing.
What are the four units in faceless assessment?
The Assessment Unit analyses the case and proposes additions, the Verification Unit does enquiry and examination of books, the Technical Unit gives specialist advice, and the Review Unit checks the draft order before it is finalised — all coordinated by the NFAC.
What happens if I do not respond to a faceless notice?
The Assessment Unit can complete the case as a best-judgment assessment under Section 271, estimating your income to the best of its judgment. That usually means higher income, tax, interest and possible penalty, so always reply through your registered account on time.
Can a faceless case be moved to a normal officer?
Yes. The Board can transfer a case to the jurisdictional Assessing Officer at any stage of the proceeding, typically for complex matters, but this is an exception rather than the rule.
Is Section 273 the same as the old Section 144B?
In substance yes — Section 273 continues and consolidates the faceless assessment regime that Section 144B of the 1961 Act introduced, keeping the NFAC and the four-unit structure while renumbering the assessment sections it refers to.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 05 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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