The faceless assessment scheme has settled into something close to a steady state. The Bombay and Delhi High Courts have answered most of the foundational questions — about jurisdiction, about the role of the Faceless Assessment Centre, about how natural-justice principles apply to a no-officer process. The big constitutional fights are largely over.
What is left is smaller, more granular, and arguably more important for the taxpayer in front of you. These are the three procedural issues I keep seeing in 2026, and each one of them is winnable if you flag it on time.
1. The vanishing show-cause notice
Under the scheme, before a variation can be made to the returned income, a show-cause notice with a draft order must be served. The Act’s language is unambiguous: before the variation, not contemporaneously with it.
What we still see is final assessment orders that bake in variations the assessee was never asked to respond to. The departmental defence, when challenged, is usually that the variation was “a logical extension” of the issue already raised in the section 142(1) notice.
That defence is weaker than it looks. The High Courts have repeatedly held that a logical extension is not a substitute for a specific show-cause. If you have an order in front of you with a head of variation you were never specifically asked about, that head is a clean ground of appeal.
Practical tip: when you draft the appeal, do not bury the procedural ground under the substantive ones. The procedural ground is the one most likely to get you a remand at the first hearing, which often resolves the substantive issue in your favour anyway.
2. The video-conferencing “option” that is being treated as a favour
The scheme provides that an assessee may request a personal hearing, and that the hearing shall be conducted by video conference. It is a right, not a request that the department may consider and decline.
In practice, VC requests are being declined — sometimes with a one-line order, sometimes silently — on grounds like “the issue is purely factual and does not require a hearing”. That reasoning has been struck down by the Madras and Calcutta High Courts more than once. The rule is that if a hearing is requested in a case where a variation prejudicial to the assessee is proposed, the hearing must be granted.
If your VC request has been declined, write back the same day. Cite the scheme, cite the most recent High Court ruling in your jurisdiction, and ask for a fresh hearing. In my experience the response rate to that letter is high — not always at the assessing-officer level, but certainly at the next review tier.
3. The limitation maths under the new Act
This is the one that catches even careful practitioners. The Income-tax Act, 2025 shortened several limitation windows, and the transitional provisions for matters already in the system as of 1 April 2026 are not as crisp as one would like.
The specific scenario to watch:
- A notice issued under the 1961 Act, before 1 April 2026.
- An assessment that completes after 1 April 2026.
- A limitation calculation done by the officer that uses the old Act’s window because “the proceedings originated under the old Act”.
That calculation is, on most readings of the transitional provisions, wrong. The shorter window of the 2025 Act applies to assessments completed after 1 April 2026, regardless of when the originating notice issued. If your assessment order is dated after that line and the officer has used the old limitation, you have a clean limitation defence.
Why these matter more than the constitutional fights
The constitutional questions about faceless assessment have been answered, and they were answered in favour of the scheme. We are not going to undo that. But the day-to-day fights — whether a particular variation got a specific show-cause, whether a hearing was offered, whether the officer counted days correctly — are exactly the kind of fights the scheme was designed to remove discretion from. When the system gets them wrong, the High Courts have been consistent about correcting it.
The job of the advocate or CA representing the assessee is to spot these gaps inside the appeal window, not after it. That is, increasingly, the work.
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