Scheme
The Central Government made the ‘e-Dispute Resolution Scheme, 2022’ vide Notification No. 27/2022, dated 05.04.2022 which came into effect from 05.04.2022. This scheme describes the procedure to the resolution of disputes electronically followed by the various faceless schemes introduced by the Government. There is a paradigm shift from the existing dispute resolution to the electronic dispute resolution in which no personal appearance of the assessees or authorized representatives is required.
Scope of the scheme
The dispute resolution under this Scheme shall be made by the Dispute Resolution Committee on applications made for dispute resolution in respect of dispute arising from any variation in the specified order by such persons or class of persons, as may be specified by the Board.
Specified order
Rule 44DAD (ii) defines the expression ‘specified order’ as-
- a draft order as referred to in sub-section (1) of section 144C (Reference to Dispute Resolution panel) of the Act;
- an intimation under sub-section (1) of section 143 of the Act (assessment) or sub-section (1) of section 200A of the Act (processing of statements of tax deducted at source) or sub-section (1) of section 206CB of the Act (processing of tax collected at source), where the assessee or the deductor or the collector 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;
- an order made under section 154 of the Act (Rectification of mistake) having the effect of enhancing the assessment or reducing the loss; or
- an order made under section 201 of the Act (consequences of failure to deduct or pay) or an order made under sub-section (6A) of section 206C (failure to pay tax deducted or collected) of the Act and in respect of which the following conditions are satisfied-
- the aggregate sum of variations proposed or made in such order does not exceed ten lakh rupees;
- 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 fifty lakh rupees; and
- the order in the case of the assessee is not based on,–
- search initiated under section 132 of the Act or requisition made under section 132A of the Act in the case of the assessee or any other person; or
- survey carried out under section 133A of the Act; or
- information received under an agreement referred to in section 90 or 90A of the Act.
The variation in the specified order relating to default in deduction or collection of tax at source shall refer to the amount on which tax has not been deducted or collected in accordance with the Act.
Procedure
The following is the procedure involved in resolution of dispute under this scheme-
Filing of application
- The assessee who fulfils the specified conditions may, in respect of any specified order, file an application electronically for dispute resolution to the Dispute Resolution Committee designated for the region of Principal Chief Commissioner of Income-tax having jurisdiction over the assessee;
- The application shall be made in Form 34BC;
- The application shall be filed-
- within such time from the date of constitution of the Dispute Resolution Committee, as may be specified by the Board, for cases where appeal has already been filed and is pending before the Commissioner (Appeals); or
- within one month from the date of receipt of specified order, in any other case.
- The application shall be submitted by email to the official email of Dispute Resolution Committee, along with proof of payment of tax on the returned income, if available.
- A fee of one thousand rupees is payable for filing the application and the proof of the same is to be attached with the application.
Examination of application
- The Dispute Resolution Committee shall examine the application with respect to the specified conditions and criteria for specified order.
- If the Dispute Resolution Committee considers that the application for dispute resolution should be rejected, it shall serve a notice calling upon the assessee to show cause as to why his application should not be rejected, specifying a date and time for filing a response.
- The assessee shall furnish a reply to the show-cause issued to him within the specified date and time or such extended time as may be allowed on the basis of application made in this behalf, to the Dispute Resolution Committee.
- The Dispute Resolution Committee shall, on a request by the assessee, provide him an opportunity of being heard through video telephony or video conferencing facility, to the extent technologically feasible.
- The Dispute Resolution Committee may, after considering the response furnished by the assessee, either allow the application or reject the application.
- The Dispute Resolution Committee shall communicate to the assessee on his registered e-mail address about the admission or rejection of the application.
On admission
- On admission of the application the Dispute Resolution Committee may call for records from the income-tax authority and further examine, as it may deem fit, with respect to the issues covered in the application.
- The Dispute Resolution Committee may seek a report from the assessing officer on the issues covered in the application or on any other issue arising during the course of proceedings.
- The Dispute Resolution Committee may call for further information from the assessee or any other person by sending an email to his registered email address.
- The assessee shall electronically submit its response to the Dispute Resolution Committee, within the time specified or such time as may be extended by the Dispute Resolution Committee on the basis of an application in this behalf.
Decision
- The Dispute Resolution Committee may, after considering the material available on record, including any further information or evidence received from the assessee, income-tax authority or any other person, may decide –
- to make modifications to the variations in specified order, which are not prejudicial to the interest of the assessee, and decide for waiver of penalty and immunity from prosecution in accordance with the provisions of rule 44DAC, and pass an order of resolution accordingly; or
- not to make modifications to the variations in the specified order, but however may decide for waiver of penalty and immunity from prosecution provisions and pass an order of resolution accordingly, which shall be treated as an order not prejudicial to the interest of the assessee; or
- not to make any modification to the specified order, and pass an order disposing off the application, which shall be treated as an order ‘not prejudicial to the interest of the assessee.
- The decision shall be made within six months from the end of the month in which application for dispute resolution is admitted by the Dispute Resolution Committee.
Dispatch of order
- The Dispute Resolution Committee shall serve a copy of the order of resolution or order disposing off the application upon the assessee and also the assessing officer for giving effect to the same, if so required.
Effect of order
- If the specified order is an order of the eligible assessee, the assessee shall not be eligible to file any reference to the Dispute Resolution Panel or an appeal to the Commissioner (Appeals) against the modified order.
Payment
- The assessing officer shall serve a copy of the modified order along with notice of demand upon the assessee specifying a date for making payment of demand.
- The assessee shall, furnish proof of payment of the said demand to the Dispute Resolution Committee and also to the assessing officer.
Immunity from prosecution
- The Dispute Resolution Committee shall, on receipt of confirmation of payment of demand, by an order in writing, grant immunity from prosecution and waiver of penalty if applicable, in accordance with the provisions of rule 44DAC.
No appeal
No appeal or revision shall lie against the modified order.
Personal Hearing
Usually a person shall not be required to appear either personally or through authorized representative in connection with any proceedings under this Scheme before the Dispute Resolution Committee or income-tax authority unless a personal hearing is requested for to make his oral submissions or present his case before the Dispute Resolution Committee. The Dispute Resolution Committee may approve the request for personal hearing. The personal hearing shall be conducted through video conferencing, including use of any telecommunication application software which supports video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board. An authorized representative appearing for the assessee at the hearing shall electronically file, before the commencement of the hearing, a document authorizing him to appear for the assessee and if he is a relative of the assessee, the document shall state the nature of his relationship with the assessee, or if he is a person regularly employed by the assessee the capacity in which he is at the time employed.
Proceedings not open to public
The proceedings before the Dispute Resolution Committee shall not be open to the public and no person (other than the assessee, his employee, the concerned officers of the Dispute Resolution Committee or the income-tax authority or the authorized representatives) shall, without the permission of the Dispute Resolution Committee, remain present during such proceedings, even on video conferencing or video telephony.
Language
The language of the Dispute Resolution Committee shall be Hindi or English, at the option of the assessee. Where any document is in a language other than English or Hindi, an English translation thereof should also be furnished along therewith. The resolution order and any other order passed by the Dispute Resolution Committee may, at the discretion of the Dispute Resolution Committee, be in Hindi or English.
Communication
All communications between the Dispute Resolution Committee and the assessee or the authorized representative of the assessee or any other person, as the case may be, shall be exchanged exclusively by electronic mode, to the extent technologically feasible. All internal communications between the Dispute Resolution Committee, or any income-tax authority shall be exchanged exclusively by electronic mode.
Electronic record
The scheme requires that an electronic record shall be authenticated by the-
- Dispute Resolution Committee, the Principal Commissioner of Income-tax or Commissioner of Income-tax, by affixing its digital signature;
- assessee or any other person, by affixing his digital signature if he is required under the Rules to furnish his return of income under digital signature, and in any other case by communicating through his registered email address.
Withdrawal
The assessee may withdraw his pending application under sub-section (1) of section 245M shall be in Form No. 34BB electronically. The same shall be verified by the person who is authorized to verify the return of income of the assessee under section 140.
Termination of proceedings
If the Dispute Resolution Committee may, at any stage of the dispute resolution proceedings, if considered necessary, for reasons to be recorded in writing and after giving an opportunity of being heard to the assessee, decide to terminate the dispute resolution proceedings if,-
- the assessee fails to cooperate during the course of dispute resolution proceedings; or
- the assessee fails to respond to, or submit any information in response to, a notice issued to him; or
- the Committee is satisfied that the assessee has concealed any particular material to the proceedings or had given false evidence;
- the assessee fails to pay the demand.
The Dispute Resolution Committee shall intimate the income-tax authority about the termination of proceedings for taking necessary action as per the provisions of the Act.
Appeal
If the application is rejected by the Dispute Resolution Committee the assessee may file an appeal to the Commissioner (Appeals) and the period taken by the Dispute Resolution Committee in deciding on the admission shall be excluded from the period available to file such appeal.
Powers of the Dispute Resolution Committee
The following powers are given to the Dispute Resolution Committee under the Income Tax Act, 1961-
- The Dispute Resolution Committee shall have the power to waive penalty or grant immunity from the prosecution provisions of the Act on fulfillment of conditions specified in rule 44DAC.
Upon receipt of proof of payment grant to the person who made the application for dispute resolution under section 245MA of the Act, waiver of penalty imposable or immunity from prosecution or both under this Act in accordance with the rule 44DAC.
- Any proceedings before the Dispute Resolution Committee shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228. 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 not for the purposes of Chapter XXVI of the Code of Criminal Procedure, 1973.
- 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.
