Under this scheme, taxpayers meeting specific criteria outlined in section 245MA of the Act can electronically submit an application to the designated DRC for the region overseen by the Principal Chief Commissioner of Income-tax with jurisdiction over the taxpayer.
The Income Tax Department has established Dispute Resolution Committees (DRCs) in 18 principal commissionerates as part of the Electronic Dispute Resolution Scheme. The Central Board of Direct Taxes (CBDT) introduced the e-Dispute Resolution Scheme, 2022, to diminish litigation and offer support to eligible taxpayers.
Under this scheme, taxpayers meeting specific criteria outlined in section 245MA of the Act can electronically submit an application to the designated DRC for the region overseen by the Principal Chief Commissioner of Income-tax with jurisdiction over the taxpayer.
Also Read– How To File Belated ITR For FY24? Know Deadline, Penalty and Other Details
How much tax do I have to pay? Calculate now
Top points
What is ‘e-Dispute Resolution Committee’?
Dispute Resolution Committee (‘DRC’) is a committee constituted by the Central Government in accordance with provisions of section 245MA of the Income-tax Act,1961, read with rule 44DAA of Income-tax Rules,1962. e-DRC is an alternative to regular appellate proceedings provided under the Income-tax Act e.g. CIT(A), Tribunal etc.
Who can approach e-DRC?
A ‘specified person’ (as defined in the answer to Q.No. 3 below) may approach the e-DRC, in respect of a dispute arising from any variation in the specified order (specified order is defined in answer to Q.No. 8), as specified by the CBDT.
Who is a ‘specified person’?
(I) ‘Specified Person’ means a person who fulfils the conditions mentioned as per section 245MA(5) of Income Tax Act, 1961 read with rule 44DAD of Income Tax Rules, 1962, which are as under:
A. he is not a person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
Read More: ITR Processing Time: Why Is Your ITR Still Under Processing In 2024? Here’s How To Track Its Status
Provided that—
(i) such order of detention, being an order to which the provisions of section-9 or section-12A of the said Act do not apply, has been revoked on the report of the Advisory Board under section-8 of the said Act or before the receipt of the report of the Advisory Board; or
(ii) such order of detention being an order to which the provisions of section-9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under sub-section (3) of section-9, or on the report of the Advisory Board under section-8, read with sub-section (2) of section-9, of the said Act; or
Read More: Have You Received Your Income Tax Refund Yet? If Not, Read Here How To Get It Done
(iii) such order of detention, being an order to which the provisions of section-12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of the said section, or on the basis of the report of the Advisory Board under section-8, read with sub-section (6) of section-12A, of the said Act; or
(iv) such order of detention has not been set aside by a court of competent jurisdiction;
B. he is not a person in respect of whom prosecution has been instituted and has been convicted of any offence punishable under any of the following Acts:
Indian Penal Code, (45 of 1860)
Unlawful Activities (Prevention) Act, 1967(37 of 1967)
Narcotic Drugs and Psychotropic Substances Act, 1985(61 of 1985)
Prohibition of Benami Transactions Act, 1988 (45 of 1988)
Prevention of Corruption Act, 1988 (49 of 1988) or
Prevention of Money Laundering Act, 2002 (15 of 2003)
Read More: ITR Filing 2024: Will You Get ITR Refund If It Is Not Verified? Details You Need To Know
C. he is not a person in respect of whom prosecution has been initiated by an Income-tax authority for any offence punishable under the provisions of the Act or the Indian Penal Code (45 of 1860) or for the purpose of enforcement of any civil liability under any law for the time being in force, or such person has been convicted of any such offence consequent upon the prosecution initiated by an Income-tax Authority.
D. he is not a person who has been convicted of any such offence consequent to the prosecution initiated by an Income-tax authority;
E. he is not notified under Section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (27 of 1992);
Read More: ITR Filing: Income Tax Refund Not Received Yet? Here’s What to Do Now
F. he is not a person in respect of whom proceedings under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 have been initiated for the assessment year for which resolution of dispute is sought as per rule 44DAD of Income Tax Rules, 1962.
(II) such other conditions, as may be prescribed.
What are additional conditions for an application to be filed before DRC against specified orders?
An assessee can approach the DRC against the specified orders, by filing Form 34BC, only when the following conditions are satisfied:
the aggregate amount of variations proposed or made in such order does not exceed Rs. 10 lakhs;
the return has been furnished by the assessee for the assessment year relevant to such order, and the total income as per such return does not exceed Rs. 50 lakhs; and
the order is not based on a search initiated under Section 132, requisition under Section 132A, survey under Section 133A, or
the order is not based on information received under an agreement referred to in Section 90 or Section 90A.
(Where the variation is relating to default in deduction or collection of tax at source, it shall refer to the amount on which tax has not been deducted or collected).
Read More: Budget 2024: Will Govt Hike Rs 1.5 Lakh Limit Under Section 80C Of Income Tax Act?
Why should one approach e-DRC?
One should approach e-DRC to get immunity from prosecution and waiver/reduction in penalty, after the payments of taxes as per the scheme notified by the CBDT vide notification No. S.O. 1642(E), Dated 05.04.2022.
What are the powers of e-DRC?
The powers of e-DRC are given in para 5(1) of the e-DRS, 2022 which are as under:
(1) The Dispute Resolution Committee shall have the power to waive penalty or grant immunity from the prosecution provisions of the Act on fulfilment of conditions specified in rule 44DAC.
(2) Any proceedings before the Dispute Resolution Committee shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purposes of section 196 of the Indian Penal Code (45 of 1860) and every income-tax authority shall be deemed to be a Civil Court for the purposes of section 195, but not for the purposes of Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).
Read More: 6 ways to save tax without making any investment
(3) If any difficulty arises in giving effect to any order of the Dispute Resolution Committee, it may, on its own motion or on an application made by the assessee or the assessing officer through the Principal Commissioner of Income-tax or the Commissioner of Income-tax, as the case may be, remove the difficulty insofar as it is not inconsistent with the provisions of the Act.
7. Can e-DRC terminate the proceedings?
e-DRC may at any stage during the proceedings, decide to terminate the proceedings, if:
(i) the appellant fails to cooperate during the course of proceedings.
(ii) the appellant fails to respond to, or submit any information in response to a notice.
(iii) committee is satisfied that assessee/appellant has concealed any particular material to the proceedings or had given false evidence.
(iv) the assessee fails to pay the demand as required in clause xviii of sub para (1) of paragraph 4 of the Scheme.
Read More: Planning To File ITR On Your Own? Salaried Taxpayers Need To Know These Things
8. When can appellant approach e-DRC?
An application can be filed to e-DRC in respect of the following orders (‘specified orders’).
A. Relating to the assessment orders
An assessee can approach the e-DRC against the following orders relating to the assessment:
a draft assessment order as referred to in Section 144C(1);
an intimation under Section 143(1), where the assessee objects to the adjustments made in the said order;
an order of assessment or reassessment, except an order passed in pursuance of directions of the Dispute Resolution Panel; or
an order made under Section 154 having the effect of enhancing the assessment or reducing the loss.
Alternatively, the assessee can also file an appeal against the order listed above with the Commissioner (Appeals) except against the draft assessment under as referred to in Section 144C(1).
B. Relating to the TDS/TCS matters
Read More: ITR 2024-25: How you can save more tax with NPS
An assessee can approach the DRC against the following orders 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)
