19.1 INTRODUCTION Income-tax Settlement Commission (ITSC) constituted by the Central Government for settlement of cases ceases to operate with effect from 1st February, 2021. Consequently, no application under section 245C for settlement of cases before the Settlement Commission can be made on or after 1st February, 2021. In order to dispose off the pending settlement applications as on 31.01.2021, the Central Government has constituted seven Interim Boards for Settlement vide Notification No. 91 of 2021 dated 10.08.2021. While pending disputes are being resolved or adjudicated through the Interim Boards for Settlement, it is also necessary to prevent tax disputes in future and settle the issues at initial stage. Therefore, in order to provide early tax certainty to small and medium taxpayers, with effect from 1 st April, 2021, new scheme of Dispute Resolution has been formulated for constitution of one or more Dispute Resolution Committee(s) (DRC).
19.2 DISPUTE RESOLUTION COMMITTEE [SECTION
245MA] (1) Constitution of Dispute Resolution Committee: The Central Government is empowered to constitute, one or more Dispute Resolution Committees, in accordance with the rules made under this Act. Dispute Resolution Committee would resolve dispute in the case of such persons or class of persons, as may be specified by the CBDT, who opt for dispute resolution under Chapter XIX-AA in respect of dispute arising from any variation in the specified order in his case and who fulfils the specified conditions. (2) Meaning of Specified order: Specified order means such order, including draft order, as may be specified by the CBDT, and, (i) aggregate sum of variations proposed or made in such order does not exceed ` 10 lakhs. (ii) such order is not based on - search initiated under section 132 or - requisition under section 132A in the case of assessee or any other person or - survey under section 133A or - information received under an agreement referred to in section 90 or section 90A. (iii) where return has been filed by the assessee for the assessment year relevant to such order, total income as per such return does not exceed ` 50 lakh.
(3) Specified Conditions: Specified conditions in relation to a person means a person who fulfils the following conditions: (I) He should not be a person, (A) in respect of whom an order of detention has been made under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. Such order of detention should not have been revoked before the expiry of the time stipulated under the relevant provisions of such Act, either on the basis of report of Advisory Board or review under the relevant provisions of that Act. Further, such order of detention should not have been set aside by a court of competent jurisdiction. The proviso to clause (a)(I)(A) of Explanation to section 245MA reads as follows - (i) such order of detention, being an order to which the provisions of section 9 or section 12A of the said Act do not apply, has been revoked on the report of the Advisory Board under section 8 of the said Act or before the receipt of the report of the Advisory Board; or (ii) such order of detention being an order to which the provisions of section 9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under section 9(3), or on the report of the Advisory Board under section 8, read with section 9(2), of the said Act; or (iii) such order of detention, being an order to which the provisions of section 12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of the said section, or on the basis of the report of the Advisory Board under section 8, read with section 12A(6), of the said Act; or (iv) such order of detention should not have been set aside by a court of competent jurisdiction; Note - Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 provides for preventive detention in certain cases for the purposes of conservation and augmentation of foreign exchange and prevention of smuggling activities and for matters connected therewith. Under this Act, the Central and State Government are empowered to detain a person (including a foreigner) to prevent such a person from smuggling of goods or acting in a manner prejudicial to conservation of foreign exchange. For detailed understanding of the above-referred provisions of the said Act, refer https://www.incometaxindia.gov.in/pages/acts/conservation-foreign-exchange- prevention-smuggling-activities-act.aspx
(B) in respect of whom prosecution for any offence punishable under the provisions of the Indian Penal Code, the Unlawful Activities (Prevention) Act, 1967, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Prohibition of Benami Transactions Act, 1988, the Prevention of Corruption Act, 1988 or the Prevention of Money-laundering Act, 2002 has been instituted and he has been convicted of any offence punishable under any of those Acts; (C) in respect of whom prosecution has been initiated by an income-tax authority for any offence punishable under the provisions of this Act or the Indian Penal Code or for the purpose of enforcement of any civil liability under any law for the time being in force, or such person has been convicted of any such offence consequent upon the prosecution initiated by an income-tax authority; (D) who is notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992; (II) He should fulfill such other conditions, as may be prescribed. (4) Powers to reduce or waive any penalty imposable under this Act or grant immunity from prosecution: The Dispute Resolution Committee, subject to such conditions, as may be prescribed, shall have the powers to reduce or waive any penalty imposable under the Income-tax Act, 1961 or grant immunity from prosecution for any offence punishable under the Act in case of a person whose dispute is resolved under Chapter XIX-AA. (5) Faceless Scheme for Dispute Resolution: The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of dispute resolution under this Chapter, so as to impart greater efficiency, transparency and accountability by - (a) eliminating the interface between the Dispute Resolution Committee and the assessee in the course of dispute resolution proceedings to the extent technologically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialization; (c) introducing a dispute resolution system with dynamic jurisdiction. The Central Government may, for the purposes of giving effect to the scheme by notification in the Official Gazette, direct that any of the provisions of this Act will not apply or will apply with such exceptions, modifications and adaptations as may be specified in the said notification. However, no such direction shall be issued after the 31st March, 2023. Every notification issued shall, as soon as may be after the notification is issued, be laid before each House of Parliament.
Question 1 What is the need for constitution of Dispute Resolution Committee (DRC)? Can an assessee make an application before DRC against an order which is based on information received under an agreement referred to in section 90 or section 90A? Answer In order to provide early tax certainty to small and medium taxpayers, with effect from 1st April, 2021, new scheme of Dispute Resolution has been formulated for constitution of one or more Dispute Resolution Committee(s) (DRC). Specified order inter alia does not include an order which is based on information received under an agreement referred to in section 90 or section 90A. Thus, an assessee can not opt for dispute resolution before DRC in respect of an order which is based on information received under an agreement referred to in section 90 or section 90A. Question 2 Can an assessee opt for dispute resolution before DRC if prosecution for any offence punishable under the provisions of the Indian Penal Code has been instituted against him and he has been convicted in respect of the same under the said Act? Answer Dispute Resolution Committee would resolve dispute in the case of such persons or class of persons, as may be specified by the Board, who may opt for dispute resolution under this Chapter in respect of dispute arising from any variation in the specified order in his case and who fulfils the specified conditions. Specified conditions in relation to a person means a person who inter alia is not a person in respect of whom prosecution for any offence punishable under the provisions of the Indian Penal Code has been instituted and he has been convicted of any offence punishable under the said Act. Thus, a person in respect of whom any prosecution has been instituted and who is convicted of any offence punishable under the Indian Penal Code, cannot opt for resolution of dispute in respect of specified order before DRC.
Vide Notification S.R.O.381 (I) /2002 Dated 15.06.2002 The Federal Government Appointed The First Day of July, 2002 On Which The Ordinance Shall Come Into Force
Vide Notification S.R.O.381 (I) /2002 Dated 15.06.2002 The Federal Government Appointed The First Day of July, 2002 On Which The Ordinance Shall Come Into Force
