e-Dispute Resolution Scheme, 2022
e-Dispute Resolution Scheme, 2022
The Central Board of Direct Taxes (CBDT) vide its notification dated 5th April 2022 notified the e-Dispute Resolution Scheme, 2022, to settle tax disputes involving small taxpayers. Taxpayers having total returned income up to Rs.50 lakh having income tax disputes not exceeding Rs.10 lakh will be able to avail of the scheme.
Taxpayers will not be required to appear before tax officials either personally or through an authorized representative in connection with any proceedings under this scheme and the entire communication will be in electronic mode.
Income-tax (Seventh Amendment) Rules, 2022
CBDT vide Notification No. 26/2022 dated 05.04.2022 in G.S.R 274(E) through Income-tax (Seventh Amendment) Rules, 2022 notifies the Constitution of Dispute Resolution Committee in accordance with the provisions of section 245MA of the Income-tax Act, 1961.
Further, The Board has notified e-Form No. 34BC for electronic filing of an application for settlement of the dispute before the DRC.
Income-tax (Seventh Amendment) Rules, 2022 is attached here for reference:
Section 245MA of the Income Tax Act
CBDT notifies e-Dispute Resolution Scheme, 2022 in accordance with the provision of section 245MA of the Income-tax Act, 1961.
Finance Act, 2021 introduced a new chapter XIX-AA in the Income Tax Act consisting of section 245MA for constituting the Dispute Resolution Committee (“DRC”) for specified persons who may opt for dispute resolution under the section 245MA. The Central Government has also been empowered to make a scheme by notification in the Official Gazette for the purpose of dispute resolution under this provision.
As a result, The CBDT has constituted DRC and also notified the e-Dispute Resolution Scheme, 2022 to dispose of applications in a faceless manner.
Constitution of Dispute Resolution Committee
The CBDT also notified the constitution of a dispute resolution committee, which shall consist of three members, including two retired officers from the Indian Revenue Service who have held the post of commissioner of income tax or higher post for five years and one serving officer not below the rank of principal commissioner of income-tax. Members will have a tenure of three years.
This DRC shall resolve disputes of persons which shall be specified by the Board. The assessee would have an option to opt for or not opt for the dispute resolution through the DRC.
Eligible disputes to be considered by the DRC
As mentioned above, Only those disputes where the returned income is 50 lakh rupee or less (if there is a return) and the aggregate amount of variation proposed in a specified order is 10 lakh rupees or less shall be eligible to be considered by the DRC.
Application for Dispute Resolution
An application to the Dispute Resolution Committee shall be made in Form No. 34BC by the person, who opts for dispute resolution under section 245MA of the Income Tax Act.
Fee filing Form No. 34BC
The application shall be submitted by email to the official email of the Dispute Resolution Committee and accompany a fee of one thousand rupees.
The Assessee needs to submit an application for dispute resolution along with the proof of payment of tax on the returned income
Procedure in Dispute Resolution
The assessee who fulfills the specified conditions may file an application electronically for dispute resolution to the Dispute Resolution Committee designated for the region of the Principal Chief Commissioner of Income-tax having jurisdiction over the assessee.
Submit Application in Form No. 34BC
The application shall be filed in Form No. 34BC referred to in rule 44DAB within such time from the date of constitution of the Dispute Resolution Committee for cases where an appeal has already been filed and is pending before the Commissioner (Appeals); or within one month from the date of receipt of specified order, in any other case;
The application shall be submitted by email to the official email of the Dispute Resolution Committee along with proof of payment of tax on the returned income, if available, and accompany a fee of one thousand rupees.
Examination of the application by DRC
The Dispute Resolution Committee shall examine the application with respect to the specified conditions and criteria for the specified order;
Upon such examination the Dispute Resolution Committee, where it considers that the application for dispute resolution should be rejected, shall serve a notice calling upon the assessee to show cause as to why his application should not be rejected, specifying a date and time for filing a response;
The decision of the Dispute Resolution Committee that the application for dispute resolution should be allowed to be proceeded with or rejected shall be communicated to the assessee at his registered e-mail address;
The assessee shall, within thirty days of receipt of the communication that the application is admitted be required to submit a proof of withdrawal of appeal filed under section 246A of the Income Tax Act or withdrawal of application before the Dispute Resolution panel, if any, to the Dispute Resolution Committee or convey that there is no aforesaid proceeding pending in his case, failing which the Dispute Resolution Committee may reject the application.
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