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Resolving Income Tax Disputes with the New e-Dispute Resolution Scheme (e-DRS)
The Central Board of Direct Taxes (CBDT) has introduced a new electronic system, the e-Dispute Resolution Scheme (e-DRS), aimed at simplifying the resolution of Income Tax disputes. Launched in 2022, the e-DRS provides an efficient, time-bound, and litigation-free mechanism for taxpayers to address their disputes with the Income Tax Department.
Key Features of the e-DRS System
The e-DRS allows taxpayers to submit their dispute resolution applications electronically through the Income Tax Department’s online portal. This initiative enhances transparency and convenience by enabling taxpayers to engage with Dispute Resolution Committees (DRCs) in 18 jurisdictions across India.
These DRCs offer an alternative to lengthy court proceedings, helping resolve disputes arising from specified orders—although the scheme doesn’t clarify which authorities issue these orders.
Eligibility Criteria for e-DRS
To qualify for the e-DRS, the following criteria must be met:
- The dispute should involve an order where the aggregate sum of variations does not exceed Rs 10 lakh.
- The returned income for the relevant assessment year should not exceed Rs 50 lakh.
- Orders arising from searches/surveys or international agreements are not eligible for e-DRS.
How to File an Application
Taxpayers can easily apply for dispute resolution via Form No. 34BC on the Income Tax Department’s e-filing portal. Here’s a step-by-step guide:
- Login to the Income Tax portal at https://eportal.incometax.gov.in using your PAN or TAN.
- Navigate through:
- Dashboard -> e-File -> Income Tax Forms -> File Income Tax Forms.
- Choose the option: Dispute Resolution Committee in Certain Cases (Form 34BC).
- Fill out Form No. 34BC with the required details and ensure accuracy.
- e-Verify the form using one of these methods:
- Aadhar OTP
- EVC (Electronic Verification Code)
- DSC (Digital Signature Certificate).
Application Deadlines and Timeframe
- The application must be submitted within one month from receiving the specified order.
- Taxpayers with pending appeals before the Commissioner of Income-tax (Appeals) can apply until September 30, 2024.
- DRCs are required to pass orders within six months of admitting an application, ensuring prompt dispute resolution.
Implementation Timeline
For specified orders passed on or before August 31, 2024, where the appeal deadline hasn’t expired, applications can be submitted until September 30, 2024. The e-DRS module is now live and ready for use.
With the introduction of this electronic system, taxpayers can avoid the hassle of protracted legal battles and resolve their Income Tax disputes efficiently and electronically. This initiative by the CBDT is a significant step toward making tax administration more taxpayer-friendly and streamlined.
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