Dispute Resolution Panel (DRP) - Section 144C - Income Tax - Ready Reckoner - Income Tax

Dispute Resolution Panel (DRP) - Section 144C The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation which is prejudicial to the interest of such assessee. Meaning of Dispute Resolution Panel Dispute Resolution Panel means a collegium comprising of three Principal Commissioners or Commissioners of Income-tax constituted by the Board for this purpose; Meaning of Eligible Assessee means:- - Any person in whose case the variation referred to in section 144C(1) arises as a consequence of the order of the Transfer Pricing Officer passed under section 92CA(3) ; and - Any non-resident not being a company, or a foreign company; - w.e.f. 01.09.2024 such eligible assessee shall not Include - person referred to in section 158BA(1) or other person referred to in section 158BD [ Inserted vide Finance (No. 2) Act, 2024 ] . [ Section 144C(15) ] Not applicable of the provisions of this section [ W.e.f. 01.09.2024 ] The provisions of this section shall not apply to any proceedings under Chapter XIV-B ( Special Procedure for Assessment of search Cases) [ Inserted vide Finance (No. 2) Act, 2024 ] . [ Section 144C(16) ] Section 144C - Reference to Dispute Resolution Panel 1. The Assessing officer while making assessment under section 143(3) / 147 / 153A is bound to follow the procedure of forwarding a draft assessment order in the following cases: Foreign Co. or Non-resident in whose case AO wants to make variation which is prejudicial to assessee. Other Assessee in whose case variation in total income arises on account of order of TPO passed u/s 92CA . 2. AO shall forward a draft of the proposed order of assessment to the eligible assessee. 3. Within 30 days from the date of receipt of draft order, the assessment shall - a) File his acceptance to AO, or b) File his objection to AO DRP. [ Section 144C(2) ] 4. Completion Assessment and Time Limit The Assessing Officer shall complete the assessment on the basis of the draft order, if- (a) the assessee intimates to the Assessing Officer the acceptance of the variation; or (b) no objections are received within the period specified in u/s 144C(2). The Assessing Officer shall, notwithstanding anything contained in section 153 or section 153B, pass the assessment order under 144C(3) within one month from the end of the month in which,- (a) the acceptance is received; or (b) the period of filing of objections u/s 144C(2) expires. 5. Time limit for issuing direction - If the assessee files objection, then DRP shall issue direction with 9 months from the end of the month in which draft order is forwarded to Assessee, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. 6. Issue of DRP Direction The Dispute Resolution Panel shall, in a case where any objection is received u/s 144C(2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. [ Section 144C(5) ] The Dispute Resolution Panel shall issue the directions referred to in u/s 144C(5), after considering the following, namely:- (a) draft order; (b) objections filed by the assessee; (c) evidence furnished by the assessee; (d) report, if any, of the AO, VO or TPO or any other authority; (e) records relating to the draft order; (f) evidence collected by, or caused to be collected by, it; and (g) result of any enquiry made by, or caused to be made by, it. 7 The DRP may, before issuing any directions referred to in u/s 144C(5),- (a) make such further enquiry, as it thinks fit; or (b) cause any further enquiry to be made by any income-tax authority and report the result of the same to it. Opportunity of being heard - No direction u/s 144C(5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue, respectively. 8. The DRP may confirm, reduce or enhance the variations proposed in the draft order. 9. If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majority of the members. 10. Binding Nature - Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer. Upon receipt of the directions issued u/s 144C(5), the Assessing Officer shall, in conformity with the directions, complete, notwithstanding anything to the contrary contained in section 153 or section 153B, the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received. 11. Appeal By the Assessee - If assessee is not satisfied with Final order passed by AO in pursuance of direction of DRP, he can file an appeal to ITAT. By the Department - Department cannot challenge direction of DRP. 12. Central Govt. may make and notify scheme for the purpose of Faceless issuance of directions by the DRP till 31 st March, 2025. 13 The provisions of this section shall not apply to any assessment or reassessment order passed by the Assessing Officer with the prior approval of the Principal Commissioner or Commissioner as provided in section 144BA(12). The Central Government may make a scheme, for the purposes of issuance of directions by the dispute resolution panel, so as to impart greater efficiency, transparency and accountability by- (a) eliminating the interface between the dispute resolution panel and the eligible assessee or any other person to the extent technologically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialisation; (c) introducing a mechanism with dynamic jurisdiction for issuance of directions by dispute resolution panel. The Central Government may, for the purpose of giving effect to the scheme made u/s 144C(14B), direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification: No direction shall be issued after the 31st day of March, 2025 . Every notification issued u/s 144C(14B) and 144C(14C) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.