Fin Min notifies constitution of dispute resolution committee, scheme for small income tax payers

The Finance Ministry has notified constitution of a Dispute Resolution Committee and e-Dispute Resolution Scheme to provide faceless disposal of cases. This arrangement will be available for assessees with taxable income up to ₹50 lakh and disputed income of ₹10 lakh.

Two notifications have been issued with an aim to implement an announcement made in this year’s Budget.

The committee

“The Centre shall constitute a dispute resolution committee for every region of principal chief commissioner of income tax for dispute resolution,” one of the notifications said. The committee will have two retired Indian Revenue Service (income tax) officers and one serving officer not below the rank of principal commissioner of income tax or commissioner of income tax. They will be appointed for three years.

The committee may grant waiver of penalty imposable or immunity from prosecution or both, in respect of the order which is the subject matter of resolution. This will be subjected to two conditions – tax has been paid in full and applicant has co-operated with the committee. However, no immunity will be granted where the proceedings for the prosecution for an offence have been initiated before the date of receipt of the application. Also, an immunity will stand withdrawn, if such person fails to comply with any of the conditions to which the immunity was granted.

e-Dispute Resolution Scheme

The notification pertaining to the scheme says a person will not be required to appear either personally or through authorised representative in connection with any proceedings before the committee or income tax authority. However, the assessee may request for personal hearing.

Notification prescribes six months period to dispose-off the application. No appeal or revision can be made against the order.

Tax officials say such a scheme is required considering the large amount of tax dues even from small taxpayers. On Tuesday, the ministry informed Rajya Sabha that over ₹8.40-lakh crore demands are outstanding with respect to individuals as on April 1. Officials say dispute means unwanted use of limited resources, not just from taxpayers’ side but also from the tax department.

Recovery of arrears

Further, the officials said strategies and targets for recovery of arrears of taxes are laid down as part of the Annual Central Action Plan document of the Central Board of Direct Taxes. Databases like Individual Transaction Statement and those maintained by other agencies like FIU-IND are made available to the field units for identification of assets for recovery.

Also, the Direct tax Vivad se Vishwas (DTVsV) Act was enacted with the objective of reducing pending income tax disputes, generate timely revenue and benefit taxpayers by providing them peace of mind, certainty and savings on account of time and resources that would otherwise be spent on litigation process.

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