Relief For Taxpayers: CBDT Rolls Out Online Dispute Resolution Scheme To Minimise Litigation

In a big relief for taxpayers, the Central Board of Direct Taxes (CBDT) has rolled out the e-Dispute Resolution Scheme, 2022 (e-DRS) with the aim to reduce litigation.

"In pursuance of section 245MA in the Income-tax Act, 1961, the Central Board of Direct Taxes (CBDT) had notified the e-Dispute Resolution Scheme, 2022 (e-DRS) with the aim to reduce litigation and provide relief to eligible taxpayers.  Section 245MA of the Act also provides for the constitution of Dispute Resolution Committees (DRC)," the Finance Ministry said in a statement on Friday (30 August).

The e-DRS enables the taxpayer, who fulfils certain specified conditions, to file an application electronically for dispute resolution to the DRC designated for the region of Principal Chief Commissioner of Income-Tax (CCIT) having jurisdiction over the taxpayer. 

"To this end, DRCs have been constituted in all 18 jurisdictional Principal CCIT regions across the country," the ministry said.

"As per e-DRS, a taxpayer can opt for e-Dispute Resolution against the ‘specified order’ as defined in clause (b) of the Explanation to section 245MA of the Act, which includes an order in which the aggregate sum of variations proposed or made does not exceed Rs 10 lakh and returned income for the relevant assessment year does not exceed Rs 50 lakh," it added.

Further, such order should not be based on search/surveys or information received under an agreement referred to under section 90 or 90A of the Act.

According to e-DRS, a DRC may make modification to the variations in the specified order and decide to grant reduction/waiver of penalty and prosecution.

The DRC is mandated to pass its order within six months from the end of month in which application for dispute resolution is admitted by it.

The application for e-DRS cane be filed in Form No. 34BC on the e-filing portal of the Income Tax Department, within one month from the date of receipt of specified order.

In cases where appeal has already been filed and is pending before the Commissioner of Income-tax (Appeals), the application for e-DRS, has to be filed on or before 30 September, the ministry said.

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