In a significant development, the Central Bureau of Investigation (CBI) has made its first arrests in an ongoing investigation into the sabotage of the Faceless Scheme of Income Tax Assessment. An IRS officer holding the rank of Deputy Commissioner of Income Tax (DCIT), along with a private individual, have been apprehended for their alleged involvement in undermining this key government initiative. The arrests highlight the persistent challenges in maintaining the integrity of tax administration, even with advanced technological solutions.
Key Details
The investigation has unearthed a disturbing conspiracy. It is alleged that the arrested individuals, in collusion with others, were contacting taxpayers with pending high-value IT assessment cases. They purportedly promised favorable outcomes in exchange for illicit payments. This blatant disregard for ethical conduct and legal frameworks threatens the very foundation of the Faceless Scheme.
Reform Under Threat
The Government of India introduced the Faceless Scheme of Income Tax Assessment as a forward-looking reform aimed at:
i) Increasing Transparency: Reducing ambiguity in the assessment process.
ii) Reducing Human Interface: Minimizing direct contact between assessors and assessees.
iii) Preventing Corruption: Eliminating opportunities for bribery and undue influence.
The “Faceless” nature of the scheme is designed to remove personal bias and discretion by preventing taxpayers from knowing who is assessing their case.
Insider Information and Bribes
Despite the scheme’s design, the accused are alleged to have been secretly collecting and disseminating confidential information, including:
i) Names of the Assessment Officers assigned to cases.
ii) Specific issues under scrutiny.
This sensitive data was then reportedly used to solicit bribes from taxpayers involved in high-value assessment and appeal cases.
Evidence of Wrongdoing
Prior to the arrests, the CBI conducted extensive searches on February 6, 2025, at 18 locations across Delhi, Mumbai, Thane, West Champaran (Bihar), Bengaluru, and Kottayam (Kerala). These searches yielded:
i) Incriminating Documents.
ii) Evidence of Undue Gratification.
iii) Digital Electronic Evidence.
Investigation Status
The case originated from a complaint filed by the Income Tax Department. Following a preliminary inquiry, the CBI registered a case against:
i) One Deputy Commissioner (IRS) (IT).
ii) Two Inspectors of the Income Tax Department.
iii) Five Chartered Accountants.
iv) One Private Person.
v) Unknown Others.
The accused are charged with attempting to defy and sabotage the purpose of the Faceless Scheme of Assessment. The investigation remains active, with authorities working to uncover the full extent of the conspiracy and bring all those involved to justice.
CBI Press Release dated 24/04/2025
CBI arrests two accused including an IRS Officer and a private person on allegations of involvement in sabotaging the Faceless Scheme of Income Tax Assessment
CBI has made first arrests today including of an IRS officer of the rank of Dy. Commissioner of Income Tax and a private person in connection with their involvement in an ongoing investigation of a case related to sabotaging of the Faceless Scheme of Income Tax Assessment.
Investigation conducted so far revealed that the arrested private person and the Dy. Commissioner of Income Tax in conspiracy with others have been contacting various assesses of pending high value IT assessment cases, promising favourable orders in their income tax cases under scrutiny in lieu of pecuniary benefits.
It may be recalled that Government of India has introduced the Faceless Scheme of Income Tax Assessment as a futurist reform in Tax Administration with an aim to increase the transparency, reduce human interface and thereby prevent corruption. This scheme is called ‘Faceless’ simply because the Assessee will not see the face of his or her Assessing Officer and will also not be able to know as to who will be conducting the assessments. This will reduce the interface, discretion and corruption. However, these accused persons have been clandestinely collecting and disseminating the confidential insider information pertaining to this scheme like the name of the assessment officer, the issues under scrutiny etc., pertaining to pending big ticket assessment/appeal cases, to the Assesses and thereafter collecting bribe amounts. The arrested accused are being produced before the Jurisdictional Court.
CBI has earlier conducted searches on 06.02.2025 at 18 places at Delhi, Mumbai, Thane, West Champaran (Bihar), Bengaluru, Kottayam (Kerala), etc. Various incriminating documents, evidences of payment of undue gratification and some digital electronic evidences were recovered during searches.
Initially a complaint was received from the Income Tax Department in this regard and an enquiry was initiated by CBI. On finding prima facie material, this case was registered by CBI against one Deputy Commissioner (IRS)(IT) & two Inspectors of Income Tax Department, five Chartered Accountants and one private person and unknown others on the allegations of attempts by these accused to defy and sabotage the purpose of the ‘Faceless Scheme of Assessment’ introduced by Government of India. Investigation is continuing.