The Central Board of Direct Taxes (CBDT) on Friday introduced the Electronic Dispute Resolution Scheme or ‘e-DRS’ on the income tax portal to help reduce tax litigations and provide taxpayers with a platform to raise disputes with the authorities for specified orders. E-DRS has been developed under Section 245MA of the Income-Tax Act, 1961. The scheme seeks to minimise litigation and offer taxpayers a cost-effective and convenient platform for dispute redressal. Under certain specified conditions, eligible taxpayers can file applications through the e-DRS system for the perusal of the relevant income tax principal chief commissioner, who heads the Dispute Resolution Committee (DRC) and has jurisdiction over their case.

CBDT has also issued a list of DRCs under all 18 jurisdictions of the principal chief commissioners across the country.

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When Can A Taxpayer File A Dispute Application?

A taxpayer who fulfils the conditions under Section 245MA of the Income-tax Act can apply to get relief against a specified order. According to the CBDT notification, a specified order includes one where the aggregate sum in dispute is not more than Rs 10 lakh. Also, the taxpayer’s income for the relevant assessment year should not exceed Rs 50 lakh.

The disputes should not be based on information received under international agreements referred to in the Income-tax Act under Section 90 or 90A.

Once the application is filed on the platform, the DRC will review it and may make modifications to the orders. They can reduce or waive penalties and prosecution as per the Income-tax rules. Notably, the DRCs are required to pass an order within six months from the end of the month in which the application was received.

How To File An E-DRS Application?

• Visit the income tax portal
• Log in to the account using PAN and password
• Go to Dashboard > e-file > Income Tax Forms > File Income Tax Forms
• Select the Dispute Resolution Committee in Certain Cases (Form 34BC)
• Fill out Form No. 34BC
• Review and verify the form using Aadhaar OTP, Electronic Verification Code (EVC), or Digital Signature Certificate (DSC)

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Important Points To Note:

• The e-DRS application should be filed using Form No. 34BC.
• It must be filed within one month of receiving the specified order.
• If an appeal is already filed but pending before the Commissioner of Income-tax (Appeals), the e-DRS application needs to be filed before September 30, 2024.
• If the order was passed on or before August 31, 2024, and there is still time left to file an appeal against the order, the e-DRS application can be filed on or before September 30, 2024.