INCOME TAX (DISPUTE RESOLUTION PANEL) RULES, 2009

[Mr. M. GOVINDARAJAN]

INTRODUCTION:

By the Finance Act, 2009 a new section 144C was inserted in the Income Tax Act, 1961 which provides for reference to dispute resolution panel if the Assessing Officer proposes to make any variation in income or loss returned by the assessee during the assessment proceedings. The Central Board of Direct Taxes, in exercise of the powers conferred by sub-section (14) of section 144C of the Income Tax Act, 1961 made 'Income Tax (Dispute Resolution) Rules, 2009 to regulate the procedure of the Dispute Resolution Panel. The said Rule has been notified vide Notification No. 84/2009 (S.O. 2958 (E)/F.No.142/22/2009-TPL), dated 20.11.2009. The said rules came into effect from the date of notification.

DISPUTE RESOLUTION PANEL:

Rule 3(1) provides that the Board may on the basis of work load and for efficient functioning, constitute panel at Delhi, Mumbai, Ahamedabad, Kolkatta, Chennai, Hyderabad, Bangalore and Pune.  Each panel has been given jurisdiction as detailed below:

§ Delhi - NCT of Delhi, Punjab, Haryana and Chandigarh, Jammu & Kashmir, Uttar Pradesh, Uttaranchal, Rajasthan and Himachal Pradesh;

§ Mumbai - Mumbai, Rest of Maharastra except Pune, Goa, Madhya Pradesh and Chhattisgarh;

§ Ahamedbad - Gujarat, Daman Diu, Dadra Nagar Haveli;

§ Kolkatta - West Bengal, North east states and Andaman and Nicobar, Bihar, Orissa and Jharkhand;

§ Chennai - Tamil Nadu and Pondicherry;

§ Bangalore - Karnataka, Kerala and Lakshadweep;

§ Pune - Pune.

Members of Panel:

Rule 3(2) provides that the Board shall assign by name three Commissioners of Income Tax to each panel as Members. If any Member of the panel is transferred the Board shall assign by name another Commissioner of Income Tax in the place of the outgoing Member of the panel to carry out the functions of the panel. The Members shall carry out the functions in addition to their regular duties.

Secretariat:

Rule 3(4) provides that each panel shall have a secretariat for receiving objections, correspondence and other documents to be filed by the eligible assessee and shall also be responsible for issuing notices, correspondences and direction if any, on behalf of the panel. The Chief Commissioner of Income Tax shall constitute the secretariat for the panel.

PROCEDURE FOR FILING OBJECTIONS:

The following is the procedure for filing objections to the draft assessment order:

Filing of objections:

§ The objections to the draft order may be filed by the assessee in person or through his agent within specified period in Form No. 35A;

§ The objections shall be in English and presented to the Secretariat of the panel;

§ The objections shall be filed in paper book form in quadruplicate duly accompanied by-

· Four copies of the draft order duly authenticated by the eligible assessee or his authorized representative;

· The evidence, if any, the eligible assessee intends to rely upon including any document or statement or paper submitted to the assessing officer.

§ In the case of draft assessment under sub-section (3) of section 143 read with section 144A, the objections shall also be accompanied by four copies of the directions issued by the Joint Commissioner or Additional Commissioner under Section144A and in the case of draft assessment under sub section (3) of section 143 read with section 147, the objections shall be accompanied by four copies of the original assessment order, if any.

§ The panel may in its discretion either accept the objections which are not accompanied by all or any of the documents;

§ If the assessee intends to rely upon any additional evidence other than those submitted to the assessing officer, such additional evidence shall not form part of the paper book but may be filed along with a separate application stating the reasons for filing such additional evidence.

Hearing of objections:

§ The panel shall issue notice to the assessee and the concerned assessing officer specifying the ate and place of hearing of the objection;

§ The panel may hold its sittings at its headquarters or at such other place as it may deem proper;

§ The panel shall also call for records relating the draft order and permit assessing officer to file report, if any, to the objections filed by eligible assessee;

§ If an authorized representative appears on behalf of the assessee he shall file the authorization letter before the commencement of the hearing;

§ The panel shall consider the application for filing additional affidavit and may either allow such application or reject it;

§ The assessee, with the permission of the panel, may urge any additional ground which has not been set forth in the objections;

§ Where the panel deems it necessary, it may call upon or, as the case may be, permit the assessee to produce any document or examine any witness or file any affidavit to enable it to issue proper directions; the panel shall, while so permitting record its reasons for such permission;

Issue of Directions by Panel:

§ On the date fixed for hearing or any other date to which hearing may be adjourned, if the eligible assessee or his authorized representative do not appear, or when they appear, upon hearing the objections, the panel may, within the specified time, issue such directions as it deems proper;

§ While hearing the objections, the panel shall not be confined to the grounds set forth in the objections but shall have power to consider any matter or grounds arising out of the proceedings;

§ On conclusion of the hearing, the panel shall issue directions within the specified period;

§ The panel shall communicate the directions to the assessee and to the assessing officer.

Passing of Assessment Order:

On receipt of the directions from the panel the Assessing Officer shall pass the assessment order in accordance with the procedure prescribed in sub section (13) of section 144C. Any appeal against the assessment order passed in pursuance of the directions of the panel shall be filed before the Appellate Tribunal in Form No. 36B. 

No abatement of proceedings:

After filing objections, if the assessee, being an individual, dies or is adjudicated insolvent, or being a company, is wound up, the proceedings before the panel shall not abate and shall be continued by the executor, administrator or other legal representative of such individual assessee or by the assignee, receiver or liquidator of such assessee being a company, as the case may be.

Rectification of mistake:

After issue of directions, I any mistake or error is apparent in such direction, the panel may, suo motu, or on an application from the eligible assessee or the assessing officer, rectify such mistake or error and also direct the assessing officer to modify the assessment order accordingly.