Dispute Resolution: formula sheet

Key formulas

Eligibility test: specified order

Specified order (order in which the Assessing Officer proposes a variation, as defined in section 379) received by the assessee + variation prejudicial to the assessee

The DRC route is for an assessee who has received a specified order and meets the conditions for that order. It is not for any variation in any order.

Eligibility test: variation limit

Aggregate of variations proposed in the specified order ≤ ₹10,00,000

The limit is on the total of all proposed variations in the specified order, not on each item. The condition is met at exactly ₹10,00,000, as section 379 sets the limit.

Eligibility test: returned income limit

Returned income ≤ ₹50,00,000

This is the income declared in the return, not the income after the proposed variation. Section 379 sets this limit.

Exclusion: search and requisition cases

Search initiated, or books of account, other documents or assets requisitioned → not eligible

State it in plain words: search cases and requisition cases are excluded.

Exclusion: treaty information cases

Order based on information received under an agreement with a foreign country or specified territory (tax treaty) → not eligible

This is the equivalent of the earlier section 245MA position. State it in plain words. Do not stretch it to all international tax cases.

Exclusion: detention or prosecution

Assessee detained or prosecuted under the listed Acts → not eligible

Listed Acts include COFEPOSA, FEMA, NDPS, UAPA, the Prevention of Corruption Act, the Benami Act, the Black Money Act, PMLA and others. Recall the category and give examples.

Constitution

DRC = committee of 3 Principal Commissioners or Commissioners of Income-tax, constituted by the Board (CBDT)

Say it is a departmental body, not a tribunal. This follows the earlier section 245MA position.

Who may apply

Eligible assessee + specified order or draft order received + dispute within the prescribed limits

All three conditions must be met. Failing eligibility makes the time limit irrelevant.

Where and how to apply

Application to the DRC in the prescribed form and manner, filed electronically

Quote the form number only if your study material states it for the 2025 Act and Rules, 2026.

Time limit for application

Within one month from the date of receipt of the specified order

Count from receipt, not from the date printed on the order. Confirm the period against your current text.

Time for the committee's order

Within the period fixed by the Act, counted from the end of the month in which the application is received

The period is about six months. The clock runs from month-end, so the start date is not the filing date.

Choice of remedy

DRC route chosen for a variation ⇒ the parallel remedy for that variation is not available on the same footing

Always state this effect in your answer, with the facts of the case.

Powers of the DRC

DRC may (1) reduce or waive penalty on the disputed matter, and (2) grant immunity from prosecution for related offences

Both reliefs apply only to the dispute before the committee and depend on the applicant's cooperation and disclosure.

Conclusive effect of order

Order is conclusive as to the matters stated in it → those matters cannot be reopened in any proceeding under the Act or any other law

The conclusive effect applies to the matters covered only. It does not cover other years or other issues.

Terms of the order

Immunity = granted subject to conditions (such as payment of tax and interest as stipulated)

Say in your answer that compliance with the stated terms is what keeps the immunity alive.

Withdrawal of immunity

Conditions of the order not complied with, OR particulars concealed, OR false evidence given → immunity may be withdrawn → penalty and prosecution revive

Consequences apply as if immunity was never granted. Concealment and false evidence are a ground for withdrawal in their own right.

Void order

Order obtained by fraud or misrepresentation of facts → void

This is a separate ground from withdrawal of immunity. Name the exact trigger in your answer.

Quick revision

• The DRC is a settlement forum for smaller disputes, meant to give early and low-cost resolution.
• Check the order first: only the specified orders named in the Act qualify.
• Check eligibility conditions on income and on the size of the variation against the limits in your study material.
• Cases linked to search or similar action are excluded; check the exclusions list in the Act.
• Assessees facing prosecution or certain serious offences under other laws are excluded.
• Apply within the time limit counted from the date of receipt of the order, not the date of the order.
• Use the prescribed form and send it to the committee as the rules require.
• The committee has a time limit to dispose of the application; note it from the study material.
• The committee may reduce or waive penalty and may grant immunity from prosecution, as the Act permits.
• Immunity depends on the assessee cooperating and making a full and true disclosure.
• In answers, always state the provision, the facts, and then a clear conclusion on eligibility or relief.
• Use the 2025 Act's terms such as tax year, never assessment year.

Common mistakes

• Testing the ₹50 lakh limit against assessed income instead of returned income. Fix: Underline the words 'returned income' or 'income declared in the return'. Use only that figure for the second limit.
• Applying the ₹10 lakh limit to each addition separately. Fix: Add all the proposed variations first. The limit applies to the aggregate.
• Counting the one-month period from the date written on the order instead of the date of receipt. Fix: Underline the words 'date of receipt' in the facts and count from there.
• Treating the DRC as an extra remedy that can be used along with the same remedy for the same variation. Fix: State that the assessee has to choose. Explain the effect on the parallel remedy in one sentence.
• Saying the DRC order is open to reopening in any later proceeding. Fix: State that the order is conclusive as to the matters stated in it, and that those matters cannot be reopened in any proceeding under the Act or any other law.
• Treating the order as covering all years and all issues of the taxpayer. Fix: Limit the conclusive effect to the matters covered by the order. Other years and issues remain open.

Exam tips

• Write the answer in provision-facts-conclusion form. State the conditions first, tick them against the facts, then conclude.
• In case scenarios, the examiner often keeps the money limits satisfied and hides the failure in an exclusion. Read every line of the facts.
• Add the variations yourself. Case facts usually split the amount into two or three items so that you must sum them.
• Keep this topic separate from the next topic on application procedure and time limits and from the topic on DRC powers and immunity. Answer only what the question asks.
• Before the exam, revise the definition of specified order, the ₹10,00,000 and ₹50,00,000 limits and the three exclusions as stated in section 379 of the Income-tax Act, 2025.
• Write the sequence in the answer: eligibility, order received, form and mode, time limit, effect, conclusion.
• Always say 'date of receipt' when you state the time limit.
• Link this topic to Scope and Eligibility and to Powers, Order and Immunity. Examiners often combine them in one case.