CBDT launches new e-DRS Scheme to ease tax disputes

The Central Board of Direct Taxes (CBDT) has introduced the Dispute Resolution Scheme (e-DRS), 2022, as a streamlined and efficient platform for taxpayers to resolve their income tax disputes. The scheme aims to reduce litigation and provide a faster and more cost-effective resolution for taxpayers.

This initiative, established under section 245MA of the Income-tax Act, 1961, will allow taxpayers to resolve disputes electronically through Dispute Resolution Committees (DRCs).

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Here’s how the scheme works:

Eligibility: Taxpayers who meet certain conditions specified in section 245MA can apply for dispute resolution. This includes cases where the disputed amount does not exceed Rs. 10 lakh and the taxpayer's income for the relevant year is below Rs. 50 lakh. The dispute must not involve information from searches or international agreements.

Application Process: Taxpayers can apply electronically using Form No. 34BC on the Income Tax Department’s e-filing portal. Applications must be submitted within one month of receiving the specified order. If an appeal is already pending, applications can be filed until September 30, 2024.

DRC Function: The DRC, established in all 18 regions across the country, can modify orders, reduce penalties, or waive prosecution. They are required to decide within six months of receiving the application.

How to Apply:

• Log in to the Income Tax portal at e-portal.incometax.gov.in.
• Use PAN/TAN for login.
• Navigate to Dashboard → e-File → Income Tax Forms → File Income Tax Forms.
• Select 'Dispute Resolution Committee in Certain Cases (Form 34BC)'.
• Complete and review Form No. 34BC.
• E-Verify the form using Aadhar OTP, EVC, or DSC.