Everything you need to know about the new online tax dispute resolution system


Income tax compliance standards have constantly evolved over time

Income tax compliance standards have constantly evolved over time

The Central Council for Direct Taxes recently notified the e-Dispute Resolution System 2022 to resolve tax disputes.

Abhishek Murali, President of the All India Tax Payers’ Association (AITPA), decodes everything you need to know about the system.

Why was a new tax dispute resolution system needed?

Income tax compliance standards have constantly evolved over time. Significant technology has been introduced in the last eight years to help compile information and take action against taxpayers who default. When an income tax assessment was issued or an injunction issued, the assessee had little choice but to file an income tax appeal and fight the case, however large or small the amount may have been. The Union government has now launched a taxpayer-friendly online dispute resolution committee.

What category of taxpayers is eligible for the scheme?

All assessees are eligible for the Dispute Resolution Committee under the following conditions. *Returned income is up to 50 lakh and tax dispute no more than 10 lakh. * Income tax has been paid in full. * No criminal prosecutions have yet been initiated. * No search/raid was initiated for the relevant assessment year. * No survey was initiated for the assessment year in question.

Who are the members of the Dispute Resolution Committee?

The Committee is composed of three members, including two retired Indian Financial Services officials who have held the post of Commissioner of Income Tax or higher for five years. It also includes an acting officer not below the rank of Chief Income Tax Commissioner, and the term of office of members is three years.

What are the benefits of the Dispute Committee mechanism?

Some of the benefits include full waiver of penalties, immunity from prosecution, transparency in procedures, and taxpayers can settle cases and avoid repeat litigation. Also, the benefit is available to the beneficiary every year, unlike the previous Settlement Commission which was limited to once in a lifetime.

How do I apply to the Arbitration Committee?

After paying ₹1,000 in fees, a Form 34BC must be filed to claim the benefits of the Dispute Resolution Committee, along with a Statement of Facts and Grounds. After the scheduled hearings, the taxpayer will be granted full waiver and immunity.

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