1. What is ‘Dispute Resolution Committee’?

Dispute Resolution Committee (hereinafter referred as 'DRC') is a committee created by the Central Government as per the provisions of section 245MA of the Income-tax Act,1961, read with rule 44DAA of Income-tax Rules,1962. DRC is an alternative to regular appeal proceedings for the cases pending/yet to be filed before the CIT(Appeals).

 

 

2. Who can approach DRC?

A taxpayer defined as a 'Specified Person' in the Income Tax Act, 1961, as per section 245MA(5) of Income Tax Act, 1961 read with rule 44DAD of Income Tax Rules, 1962, can approach DRC by filing Form 34BC.

 

 

3. ‘Specified person’ who can avail the benefit of Dispute Resolution Scheme (hereinafter referred as ‘e-DRS’).

 

(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:

1. 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.

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of detention, being an order to which the provisions of section-9 or section-12A of the said Act do not apply, has been revoked on the report of the Advisory Board under section-8 of the said Act or before the receipt of the report of the Advisory Board; or

(ii) such order of detention being an order to which the provisions of section-9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under sub-section (3) of section-9, or on the report of the Advisory Board under section-8,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

(iii) such order of detention, being an order to which the provisions of section-12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of the said section, or on the basis of the report of the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;

 

2.  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)

 

3.  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.

 

4. he is not a person who has been convicted of any such offence consequent to the prosecution initiated by an Income-tax authority;

 

5. he is not notified under Section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (27 of 1992);

 

6. 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.

 

4. What are conditions for an application to be filed before DRC against specified orders?

Taxpayer can approach the DRC against the specified orders, by filing Form 34BC, only when the following conditions are satisfied:

 

 

1. the aggregate amount of variations/ additions proposed or made in such order does not exceed Rs. 10 lakhs;
2. 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
3. the order is not based on a search initiated under Section 132, requisition under Section 132A, survey under Section 133A, or
4. the order is not based on information received under an agreement referred to in Section 90 or Section 90A.
5. Where the addition of 10 lakh is relating to default in deduction or collection of tax (TDS/TCS) at source, it shall be the amount on which tax has not been deducted or collected by the person who was supposed to deduct or collect TDS.

 

 

5. What are the ‘specified order’ as per rule 44DAD against which taxpayer can approach DRC?

An application can be filed to DRC in respect of the following orders ('specified orders').

 

1. Relating to the assessment orders

A Taxpayer can approach the DRC against the following orders relating to the assessment:

1. a draft assessment order as referred to in Section 144C(1);
2. an intimation under Section 143(1), where the taxpayer objects to the adjustments made in the said order;
3. an order of assessment or reassessment, except an order passed in pursuance of directions of the Dispute Resolution Panel; or
4. an order made under Section 154 having the effect of enhancing the assessment or reducing the loss.

 

2. Relating to the TDS/TCS matters

A taxpayer 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)

 

 

6. Why should taxpayer approach to DRC?

Taxpayer can approach DRC to get immunity from prosecution and waiver/reduction in penalty, after the payments of taxes and for timely disposal of appeal, as per the scheme notified by the CBDT notification No. S.O. 1642(E), Dated 05.04.2022.

 

 

7. What are the powers of DRC?

The powers of 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 given in rule 44DAC.

(2) Any proceedings before the Dispute Resolution Committee shall be deemed to be a judicial proceeding as per 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).

(3) If any difficulty arises in giving effect to any order of the Dispute Resolution Committee, it may, on its own motion or on the request of taxpayer through an application or on the request of the assessing officer send through the Principal Commissioner of Income-tax or the Commissioner of Income-tax, as the case may be can remove the difficulty, keeping that it is not inconsistent with the provisions of the Act.

 

 

8. Can DRC terminate the proceedings?

 DRC may at any stage during the proceedings, decide to terminate the proceedings, in case:

(i) the taxpayer fails to cooperate during the course of proceedings.

(ii) the taxpayer fails to respond to, or submit any information in response to a notice.

(iii) committee is satisfied that taxpayer /taxpayer has concealed any particular material to the proceedings or had given false evidence.

(iv) the taxpayer fails to pay the demand as required in clause xviii of sub para (1) of    paragraph 4 of the Scheme. 

 

 

9. How to file application before DRC?

An application to the DRC shall be made in Form No. 34BC electronically in respect of the dispute arising from any variation in the specified order. Such application shall be accompanied by a fee of Rs. 1,000 as per rule 44DAB of Income Tax Rules, 1962. The steps to file Form 34BC are as under:

Step 1:       Click- Login on Income tax Portal www.eportal.incometax.gov.in

Step 2:       Click- Using PAN / TAN as user ID

Step 3:       Click- Navigate to e-file Income Tax Forms

Step 4:       Click- File Income Tax Forms and under tab 'Persons not dependent on any source of Income (Source of Income not relevant) -> select Dispute Resolution Committee in Certain Cases (Form 34BC)

Step 5:       Click- Fill Form No. 34BC (provide attachment, as applicable) and the self-declaration available on e-filing portal & pay the requisite fee.

Step 6:       Review the details on the preview screen and proceed towards E-verifying the form and check whether all the details are correctly filled.

Step 7:       The taxpayer will E-Verify the Form No. 34BC using Aadhar OTP, EVC or DSC.

Step 8:       After successfully filing of Form No. 34BC along with attachments and self-declaration, the Jurisdictional Authority will call for relevant documents from the taxpayer through e-proceedings.

 

 

 

10. Who can file Form 34BC?

 

Any taxpayer who fulfils the specified conditions (please refer Q no 4 above) may, in respect of any specified order (please refer Q no.5) can file an application to the Dispute Resolution Committee.

 

 

11. What are the modes in which Form 34BC can be filed?

 

Form 34BC can only be filed online on the e-Filing portal.

 

12. How can Form 34BC be e-verified?

 

The taxpayer can E-Verify the form 34BC using Aadhaar OTP, EVC or DSC. You can refer to “How to E-Verify” user manual to learn more.

 

 

13. What is the application fee for filing form before DRC?

 

The taxpayer is required to pay an amount of Rs. 1,000/- as application fee through e-pay tax functionality for filing form 34BC.

 

 

14. How to pay application fee through e-Pay tax functionality?

 

The application fees shall be paid through e-Pay tax functionality available on E-filing portal using:

 

• For PAN User: E-Pay -----> 'Fee/Other payment' tile -----> Major head - ‘Miscellaneous Receipts (0075) -----> Minor head - ‘other miscellaneous receipts (800)’ -----> Subtype of Payment - "14-Application Fee u/s 245MA”

 

• For TAN User: E-Pay -----> 'Miscellaneous Receipts' tile -----> Major head - ‘Miscellaneous Receipts (0075) -----> Minor head - ‘other miscellaneous receipts (800)’ -----> Subtype of Payment - "14-Application Fee u/s 245MA”  

 

 

15. Does Form 34BC require any mandatory attachment?

 

Yes, Form 34BC requires to mandatorily attach ‘documentary evidence relied upon by taxpayer’ and ‘Grounds of application’. Further, the taxpayer has to attach the followings documents along with Form 34BC:

 

• Copy of order/Intimation by A.O/ Draft Order
• Demand Notice, if any
• Proof of payment of application fee
• Proof of payment of tax paid on returned income.
• Grounds of application

 

 

16. What should the taxpayer do if submission of Form 34BC fails showing error message, “Invalid Input” or “Submission Failed”?

 

Before filing Form 34BC profile details such as “Contact Details” (or “Key Person Details” in case of other than individual assesee) under “My Profile”, are to be updated and to ensure that all mandatory fields are filled.

 

 

17. Is Revision functionality available for Form 34BC?

 

No, Form 34BC once filed cannot be revised.

 

18. Where to view/download the filed form details after filing of Form 34BC?

 

Filed Form 34BC details can be viewed/ downloaded under e-file tab----> Income Tax Forms---->View filed forms ----> 34BC.

 

 

19. Will the taxpayer get any communication after filing of Form 34BC?

 

Yes, SMS and e-mail communication will be sent to taxpayer after successful filing of Form 34BC.

 

 

20. What should the taxpayer do if not able to view the filed form details or receive any communication regarding filing of form 34BC?

 

For any such issue, grievance may be raised under “Grievances” tab along with relevant ARN Receipt, Acknowledgement number or any other relevant attachment.

 

21. What is the Time limit to apply before DRC?

The application for e-DRS is to be filed in Form No. 34BC referred in rule 44DAB of the Rules, on the E-filing portal of the Income Tax Department:

1. In cases where appeal before CIT(Appeals) is yet to be filled, within one month from the date of receipt of specified order.
2. In cases where appeal has already been filed and is pending before the Commissioner of Income-tax (Appeals), the application for e-DRS, is to be filed on or before 30.09.2024.
3. In cases where the specified order has been passed on or before 31.08.2024 and the time for filing appeal against such order before CIT (Appeals) has not lapsed, the application for dispute resolution can be filed on or before 30.09.2024.

 

22.  How will the Taxpayer know whether his application under Form 34BC is accepted or rejected?

 

After successful submission of Form 34BC before the designated Dispute Resolution Committee, the taxpayer will receive, on his registered e-mail address as well the chosen e-mail at point 12 of the Form 34BC and under e-proceedings on the e-filing portal.

 

The taxpayer will receive communication for:

1. If after submission any deficiency is found in the application then a Deficiency Letter will be issued asking taxpayer to remove the deficiency.

 

2. A letter accepting the application.

 

3. A letter asking the taxpayer to show cause why his application be not rejected, giving reasons for the proposed rejection.

 

 

23. How will the taxpayer remove the deficiency in his application?

 

The taxpayer can remove the deficiency by responding under e-proceedings on the e-fling portal. The taxpayer can send the required documents/information to DRC through ‘submit response button’.

 

 

24. What will happen to ‘pending appeal’ after rejection of application by the DRC OR if no appeal has been filed before the CIT(Appeals) before coming to DRC?

 

1. If the taxpayer has already filed appeal before CIT(Appeals) before approaching to DRC then after acceptance of the application in form 34BC byDRC, the pending appeal proceedings will be suspended/abated, If the application is rejected by DRC then taxpayer can pursue his appeal already filed before CIT(Appeals);

 

2. If taxpayer has directly approached the DRC, against the specified orders then, after rejection of his appeal by DRC, he needs to file a fresh appeal before CIT(Appeals).

 

 

25. What should taxpayer do after the receipt of communication from DRC that his application is accepted by DRC?

 

The taxpayer is required to submit a proof of withdrawal of appeal filed before the CIT(Appeals) or convey that there are no appeal proceedings pending in his case, within 30 days from the receipt of the communication from DRC that the application is accepted.

 

 

26. What is the proof of withdrawal of appeal filed under section 246A of the Act or withdrawal of application before the Dispute Resolution committee?

 

Copy of the request letter written to CIT(Appeals) is a sufficient proof.

 

 

27.  What if application of taxpayer is rejected by DRC?

 

In case of rejection of application by DRC, the taxpayer can file appeal before CIT(Appeals) and the time period taken by DRC in deciding on the admission shall be excluded from the period available to file such appeal. In case appeal was already filed before CIT(Appeals), before filing application to DRC, the taxpayer can pursue his pending appeal to the CIT(Appeals).

 

 

28. What will happen to the original appeal filed before CIT(Appeals), in the event of application being accepted by DRC?

 

The CIT(Appeals) will pass an order in pending appeal as ‘Dismissed as Withdrawn’ after the conclusion of DRC proceedings.

 

 

29. How will the proceedings before DRC proceed?

The taxpayer will receive all the communications from DRC through e-proceedings tab on the e-filing portal and on his registered e-mail ID and the e-mail ID mentioned by him in the point 12 of Form 34BC. 

 

 

30. Can taxpayer furnish additional documentary evidence during the DRC proceedings?

 

Yes, he can file additional documentary evidence during the DRC proceedings also.

 

 

31. Can taxpayer avail opportunity of personal hearing before DRC?

 

No personal hearing will be given. Taxpayer may submit his response through e-proceedings on e-filing portal only. But he can ask for a hearing through video telephony or video-conferencing facility. Video hearing can be conducted through Webex, Google meet etc.

 

 

32. Is there any time limit for completion of proceedings by DRC?

 

Yes, DRC will pass order [para4(1)(xv) of the DRS,2022] within six months from the end of the month in which application was admitted by DRC.

 

 

33. What types of orders are passed by DRC

 

DRC can pass three types of orders. They are as under:

(i)    make modifications/ variations in the specified order

(ii)    decide for waiver/reduction of penalty and immunity from prosecution in accordance with Rule 44DAC

(iii)  not make modifications/variations in the specified order 

 

 

34. How will taxpayer know that the proceedings before Dispute Resolution Committee are over?

 

Dispute Resolution Committee will send a copy of the resolution/order disposing off the application, as the case may be, to the mail of the taxpayer and also to the jurisdictional assessing officer for giving effect to the same. Also, order against the filed Form 34BC can be viewed by logging into E-filing account, navigate to Pending Actions -----> e-Proceedings----> For your Information tab

 

 

35. Procedure to be followed by Jurisdictional Assessing Officer on receipt of the order passed by DRC.

 

The Jurisdictional Assessing Officer (JAO) shall serve/send a copy of the modified order in view of DRC directions along with notice of demand to the taxpayer, specifying the date by which payment is to be made.

 

 

36. What will taxpayer do after the payment of demand?

 

The taxpayer shall furnish the proof of payment of demand to DRC and also to the Jurisdictional Assessing Officer. The DRC on receipt of confirmation of payment of demand, by an order in writing, grant immunity from prosecution and waiver/reduction of penalty, if applicable.

 

 

37. Whether Appeal or Revision against modified order is allowed?

 

No appeal or revision shall lie against the order passed by the Assessing Officer to give effect to the order of resolution of the DRC.

 

 

38. Can taxpayer go back to CIT(Appeals), if not satisfied with order of DRC?

 

No, he cannot go back to CIT(Appeals) once the application is accepted by the DRC.

 

 

39. Can taxpayer add an Authorized Representative to file Form 34BC on his behalf?

 

Yes, taxpayer can add an Authorized Representative to file Form 34BC on his behalf. Kindly refer to ‘Authorize / Register as Representative User Manual’ to learn more.

 

 

40. What would happen if DRC grants waiver/reduction of penalty?

 

In such a case the penalty pending with Faceless Penalty Unit would be transferred to Jurisdictional Assessing Officer. After transfer of penalty proceedings, the Jurisdictional Assessing Officer will pass an appropriate order giving effect to DRC order granting waiver/reduction of penalty.