On 5th April, 2022, Ministry of Finance notified Income Tax (7th Amendment) Rules, 2022. The Central Board of Direct Taxes (CBDT) with the new financial year aims to bring more transparency in tax payments and returns by reducing disputes between officials /authorities and taxpayers. These rules will be made applicable with immediate effect.

The committee is formed by Central Government under Sec. 245-MA(1) of Income Tax Act, 1961 for persons who opts for dispute resolution in matters where dispute has arisen due any variation in the specified order in his case and who fulfils the specified conditions. The committee will have the powers to reduce, waive any penalty or give immunity from any offence punishable.

Key Points:

Dispute Resolution Committee (DRC)-

New Rule 44-DAA under Part IX-AA is inserted to constitute Dispute Resolution Committee (DRC) in every region of Principal Chief Commissioner. DRC will be constituted for the period of three years and consist of three members. The members to the committee will be officers from Indian Revenue Service (Income-tax) and officer not below the rank of Principal Commissioner of Income-tax or Commissioner of Income-tax as specified by the CBDT.

Functions of DRC:

  • eliminating the interface between the Dispute Resolution Committee and the assessee in the course of dispute resolution proceedings to the extent technologically feasible
  • optimising utilisation of the resources through economies of scale and functional specialisation
  • introducing a dispute resolution system with dynamic jurisdiction.

Procedure adopted to initiate resolution:

Under the provisions of Rule 44-DAB, an application to DRC will be made in Form-34BC by the person opting for dispute resolution under Sec. 245-MA of the Act in respect of dispute arising from any variation in the specified order in his case and who fulfills the specified conditions[ Rule 44-DAD(iii)].

Powers of DRC:

DRC has been allotted with powers under Rule 44-DAC to reduce or waive penalty imposable or grant immunity from prosecution or both after the information of any dispute under e-Dispute Resolution Scheme, 2022. An immunity granted to a person in case where he fails to comply with any of the conditions subject to which the immunity was granted and thereupon then it will be deemed that such immunity  was never granted.

*Shubhi Srivastava, Editorial Assistant has reported this brief.

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