• The Central Board of Direct Taxes (CBDT) said Dispute Resolution Committees (DRCs) have been set up in all the 18 Principal Commissionerates under the electronic Dispute Resolution Scheme (e-DRS).

• The CBDT had notified the e-Dispute Resolution Scheme, 2022 with the aim to reduce litigation and provide relief to eligible taxpayers.

• Section 245 MA has been inserted in the Income-tax Act, 1961 to create a new mechanism for small taxpayers, which allows such taxpayers to resolve their disputes with minimum cost and compliance burden.

• For ensuring efficiency, transparency and accountability, the e-Dispute Resolution Committee Scheme, 2021 was notified on April 5, 2022.

• The e-DRS enables the taxpayer, who fulfils certain specified conditions as stipulated in section 245MA of the Act, to file an application electronically for dispute resolution to the DRC designated for the region of Principal Chief Commissioner of Income-tax having jurisdiction over the taxpayer.

• A taxpayer can opt for e-Dispute Resolution against the ‘specified order’, which includes an order in which the aggregate sum of variations proposed or made does not exceed Rs 10 lakh and returned income for the relevant assessment year does not exceed Rs 50 lakh.

• Further, such order should not be based on search/surveys or information received under an agreement referred to under section 90 or 90A of the Act.

• According to e-DRS, a DRC may make modification to the variations in the specified order and decide to grant reduction/waiver of penalty and prosecution. 

• The DRC is mandated to pass its order within six months from the end of month in which an application for dispute resolution is admitted by it.

Central Board of Direct Taxes

• The Central Board of Direct Taxes is a statutory authority functioning under the Central Board of Revenue Act, 1963. CBDT functions as a division of the Ministry of Finance under the department of revenue. 

• Its functions include formulation of policies, dealing with matters relating to levy and collection of direct taxes, and supervision of the functioning of the entire Income Tax department. 

• CBDT also proposes legislative changes in direct tax enactments and changes in rates and structure of taxation in tune with the policies of the government.

• The Board comprises the chairman and six members. The chairman and other members have been assigned territorial zones for the purpose of supervising and monitoring the work of field formations.

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