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Highlights of the e-dispute Resolution Scheme, 2022

e-Dispute Resolution Scheme, 2022 has been recently launched by the Central Board of Direct Taxes (CBDT) with a view to settle tax disputed of small tax payers. The biggest benefit of this scheme is that small taxpayers are no more required to appear before the tax officials personally or through an authorised representative in relation to any proceeding under this scheme and the entire official communication regarding this scheme will be done in an electronic mode.       

Who are eligible to avail the benefits of e-dispute Resolution Scheme?

Those taxpayers who have total returned income up to Rupees 50 lakhs with income tax disputes not exceeding Rupees 10 lakhs are eligible to avail this scheme. The dispute resolution committee shall look into the applications made under Chapter XIX-AA of the Income Tax Act^[1], 1961 in respect of disputes arising from any variations in the specified order by such persons or class of persons as may be specified by the Board.        

Highlights of the e-Dispute Resolution Scheme  

A notification has also been released by the CBDT to constitute a dispute resolution committee which will comprise of three members; two of which will be retired officers from the Indian Revenue Services who have held the post of Commissioner of Income Tax or a higher post for more than five years and the third member of the committee shall be a serving officer not below the rank of principal commissioner of Income Tax.

These members will have a tenure which extends to three years. 

Procedure in Dispute Resolution

1. The assessee who falls within the specified conditions may file an application in electronic mode for dispute resolution to the dispute Resolution Committee which is designated for the region of Principal Chief Commissioner of Income Tax which has jurisdiction over the assessee;
2. The applications shall be filed in Form No. 34BC referred to in rule 44DAB:
3. Within such time from the date of constitution of the Dispute Resolution Committee as may specified by the Board for cases where appeal has already been pending before the Commissioner (Appeals); or
4. Within a period of one month from the date of receipt of the specified order, in other cases;
5. The submission of the application shall be done by e-mailing the application to the official email id of the Dispute Resolution Committee along with the proof of payment of tax on the returned income, if available and a fees of 1 thousand rupees also needs to be paid along.

Screening of the Application

1. The first step in screening of the application begins by examination of the application by the Dispute Resolution Committee with respect to the conditions and criteria for the specified order;
2. In cases where the dispute resolution committee finds that a particular application does not fulfil the necessary conditions and needs to be rejected, then the committee serves a notice to calling upon the assessee to show cause why his application should not be rejected. The committee also specify the date and provides time for filing of response;
3. If it is technology feasible, then the dispute resolution committee can grant an assessee an opportunity of being heard through video conferencing mode, if the demand is made by the assessee;
4. The assessee needs to file a response to the show cause notice sent by the committee within the specified date and time or such extended time allowed on the basis of application made in this behalf by the committee;
5. After the considering the response against the show cause notice, the committee can either reject the application or decide the application on the merits according to the procedure laid down and in cases where no response is received, the committee can choose to reject the application.
6. The decision taken by the committee to either reject the response or to decide on merits shall be communicated to the applicant on its registered email address.
7. Within the 30 days of receipt of the communication of admission of the application, the applicant has to submit a proof of withdrawal of appeal under section 246A of the Act or withdrawal of application before the Dispute Resolution panel, if any, to the Dispute Resolution Committee or convey to the committee that there is no aforesaid proceedings pending in the case. If the abovementioned communication is not made, the Dispute Resolution Committee may reject the application.

Powers of the Disputes Resolution Committee

1. The Committee has the power to waive penalty or grant immunity from prosecution provisions of the Income Tax Act if the conditions specified under section 44DAC have been fulfilled.
2. Any proceeding before the Dispute Resolution Committee shall be deemed to be a judicial proceeding within the meaning of section 193 and 228 and for the purposes of section 196 of the Indian Penal Code and every Income Tax Authority shall be deemed to be a Civil Court for the purposes of section 195 but for chapter XXVI of the CrPC, 1973.
3. In case any difficulty arises in giving effect to any of the order of the committee, the committee 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 remove the existing difficulty to the extent it is not inconsistent with the provisions of the Act.   

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