Penalty proceedings under faceless appeals require show cause responses and Commissioner determination with digital orders communicated for action.

The Commissioner (Appeals) may initiate penalty proceedings for noncompliance by issuing a show-cause notice through the National Faceless Appeal Centre, which shall serve the notice and forward any response. After considering available material and any response, the Commissioner must either prepare and digitally sign a penalty order and send it to the Centre or drop the penalty after recording reasons; the Centre must then communicate the outcome to the appellant and notify the Assessing Officer for further action under the Act.

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