The Central Board of Direct Taxes (CBDT) has rolled out the e-Dispute Resolution Scheme (e-DRS), 2022 as a significant initiative to reduce litigation and provide relief to eligible taxpayers. This scheme, introduced under section 245MA of the Income-tax Act, 1961, aims to simplify the process of dispute resolution by allowing taxpayers to file applications electronically for resolution through designated Dispute Resolution Committees (DRCs).
Key Highlights of the e-Dispute Resolution Scheme (e-DRS), 2022
The e-DRS is designed to minimize litigation and offer a streamlined, electronic platform for resolving disputes between taxpayers and the Income Tax Department.
Dispute Resolution Committees (DRCs)
DRCs have been constituted in all 18 jurisdictional Pr. CCIT regions across India to implement the e-DRS. These committees are tasked with reviewing applications and making decisions on dispute resolutions.
Eligibility for e-Dispute Resolution
Taxpayers can opt for e-Dispute Resolution against a ‘specified order’ under certain conditions:
- Aggregate Sum of Variations: The sum of variations proposed or made should not exceed Rs. 10 lakh.
- Returned Income: The returned income for the relevant assessment year should not exceed Rs. 50 lakh.
- Exclusions: The specified order should not be based on:
- Search or surveys conducted under the Income-tax Act.
- Information received under an agreement referred to under section 90 or 90A of the Act.
Orders against which e-DRS can be opted
4A. Eg. Of assessment orders for which e-DRS can be opted –
- An intimation under Section 143(1), where the assessee objects to the adjustments made in the said order;
- An order made under Section 154 having the effect of enhancing the assessment or reducing the loss.
- Other Assessment Orders
4B. Relating to the TDS/TCS matters
(a) an intimation under Section 200A(1), where the deductor objects to the adjustments made in the said order; (b) an intimation under Section 206CB(1), where the collector objects to the adjustments made in the said order; (c) an order made under Section 201 or an order made under Section 206C(6A).
mportant points
As per Section 245MA of the Act, 18 Dispute Resolution Committees (DRC) have been constituted across Pr CCIT jurisdictions.
The order of the DRC shall be passed by 31st March 2025 i.e. 6 months from the end of the month in which the application for e-DRS is made.
Appeal incase filed against the Order has to be withdrawn.
Order of DRC cannot be appealed against. Hence it is a Final Conclusive Order.
However, incase an application for e-DRS has been rejected, then the time in e-DRS shall be excluded from the time limit for filing of appeal.
Before rejecting an SCN has to be issued with opportunity of hearing.
DRC cannot enhance the demand.
Important points
A. Every application in connection with resolution of dispute shall be accompanied by a fee of Rs. 1000/-
B. E-verification of Form 34BC is mandatory either through DSC or EVC.
C. Filed Form 34BC (along with acknowledgement and all the attachments) is required to be sent to the respective email-id of the jurisdictional e-DRC.
D. Once your application of Form 34BC is accepted by e-DRC, then please withdraw Form 35, in case any appeal has already been filed against the same order.
Documents required for filing –
A. Copy of order/Intimation by A.O
B. Demand Notice
C. Details of application fees paid
D. Detail of tax paid on returned income
E. Statement of Facts, Grounds of Application & Documentary Evidence
Application Process
- Filing of Application: Taxpayers must file the e-DRS application in Form No. 34BC within one month from the date of receipt of the specified order. The form can be submitted electronically through the Income Tax Department’s e-filing portal.
- DRC’s Authority: The DRC is authorized to make modifications to the variations in the specified order and may grant reduction or waiver of penalties and prosecution under rule 44DAC of the Income-tax Rules, 1962.
- Timeline for Resolution: The DRC is required to pass its order within six months from the end of the month in which the application for dispute resolution is admitted.
Special Considerations for Pending Appeals
- If Appeal is Pending: In cases where an appeal has already been filed and is pending before the Commissioner of Income-tax (Appeals), the application for e-DRS must be filed on or before 30th September 2024.
- Specified Orders Passed Before 31st August 2024: For orders passed on or before 31st August 2024, where the time for filing an appeal has not lapsed, the e-DRS application must be submitted by 30th September 2024.
How to Access e-DRS Module
Taxpayers can access the e-DRS module by following these steps:
- Login to the Income Tax e-filing portal: https://eportal.incometax.gov.in.
- Navigate to: Dashboard -> e-File -> Income Tax Forms -> File Income Tax Forms.
- Under the tab ‘Persons not dependent on any source of Income (Source of Income not relevant)’, select Dispute Resolution Committee in Certain Cases (Form 34BC).
- Fill Form No. 34BC and review the details.
- E-Verify the Form using Aadhar OTP, EVC, or DSC.
I
The introduction of the e-Dispute Resolution Scheme (e-DRS), 2022, by the CBDT is a significant step towards minimizing tax litigation and providing a more straightforward, transparent, and efficient mechanism for dispute resolution. By enabling electronic filing and resolution, the scheme is expected to reduce the burden on both taxpayers and the tax administration, fostering a more conducive environment for compliance and dispute resolution in India’s tax system.
This initiative aligns with the government’s broader objective of improving the ease of doing business and enhancing taxpayer satisfaction by reducing the complexities associated with tax disputes.
Important Links and Resources
- List of DRCs and Email Addresses: Click here
- Access e-DRS Module: Income Tax e-filing Portal
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