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Advanced Direct Tax Laws and Practice · Appeals

Revisional Powers and Dispute Resolution Alternatives under Income-tax Act, 2025

Updated 11 October 2026 · Fact-checked

Revision is a power of a senior tax authority, such as the Principal Commissioner, to correct an order. An appeal is a remedy the assessee files. The Dispute Resolution Panel (DRP) under section 275 lets an eligible assessee object to a draft assessment order before the final order is passed. Solve questions by identifying the route, time limits and effect.

Understand Revisional Powers and Dispute Resolution Alternatives

Start with three routes. An appeal is filed by the assessee against an order. A revision is the department's own senior authority reviewing an order. A dispute resolution alternative tries to settle the matter before a final order exists, or outside the normal appeal ladder.

The Dispute Resolution Panel is the alternative the supplied text covers. Under section 275, the Assessing Officer first sends a draft order to an eligible assessee if he proposes a variation that is prejudicial to that assessee. The assessee then chooses: accept the variation, or object. Objections go to the DRP and the Assessing Officer. If the assessee accepts, or files no objection in time, the Assessing Officer completes the assessment on the basis of the draft order.

Who is an eligible assessee? Two groups: a person whose variation arises from the Transfer Pricing Officer's order under section 166(6), and any non-resident (not being a company) or any foreign company. The section does not apply to persons referred to in section 292(1) or section 295. It also does not apply to proceedings under Chapter XVI-B, or to assessment or reassessment orders passed with prior approval under section 274(12).

The DRP is a collegium of three Principal Commissioners or Commissioners of Income-tax constituted by the Board. It issues written directions that state the points of determination, the decision and the reasons. Its directions bind the Assessing Officer. Once the final order follows the directions, the appeal route changes: section 357 excludes orders passed in pursuance of DRP directions from appeal before the Commissioner (Appeals). So the DRP route is a choice with consequences, and you must say so in answers.

For revision by the Principal Commissioner or Commissioner, the supplied text has no provision. In an answer, state the general idea, that it is a supervisory power over orders, and do not quote a section number you cannot verify from the Act text you have studied.

Key rules to remember

Time to respond to draft order
Eligible assessee: accept or object within 30 days of receipt of the draft order
Objections are filed with both the DRP and the Assessing Officer. Section 275(2).
Who is an eligible assessee
Variation arising from TPO order under section 166(6), OR a non-resident (not a company), OR a foreign company
Persons under section 292(1) or section 295 are excluded. Section 275(17) and (18).
DRP time limit
No direction after 9 months from the end of the month in which the draft order is forwarded
Section 275(13).
Final order after DRP directions
Assessing Officer completes assessment within 1 month from the end of the month of receipt of directions, conforming to them
No further hearing to the assessee. Section 275(14).
Final order without objection
Within 1 month from the end of the month in which acceptance is received or the objection period expires
Section 275(4), as substituted w.e.f. 1-4-2026.
DRP powers
Confirm, reduce or enhance the variation. Cannot set aside or direct further enquiry and fresh order
Section 275(8). It may enhance on matters not raised by the assessee (section 275(9)).
Appeal effect
Order passed in pursuance of DRP directions is not appealable to Commissioner (Appeals) under section 357
See section 357(d) and (e).

How to solve Revisional Powers and Dispute Resolution Alternatives questions

Use this method for any case on revision or dispute resolution.

  1. 1Identify the stage: draft order, final order, or an order already passed.
  2. 2Test whether the assessee is eligible under section 275(17) and not excluded by section 275(18).
  3. 3Check the carve-outs: section 274(12) approval cases and Chapter XVI-B proceedings are outside section 275.
  4. 4Apply the 30-day limit for acceptance or objection, and note where objections are filed.
  5. 5State what the DRP can do: confirm, reduce or enhance, hear both sides, issue reasoned binding directions within nine months.
  6. 6State the consequence for the final order and the appeal route under section 357.
  7. 7Conclude with a clear recommendation, such as accept, object to the DRP, or appeal.

Quickest way: Eligibility, deadline, effect

When to use it: Use for short case questions with limited time.

  1. Write: eligible assessee? Name the limb (TPO variation, non-resident non-company, foreign company).
  2. Write: 30 days, objections to DRP and Assessing Officer.
  3. Write: DRP directions bind, and the DRP cannot set aside.
  4. Write: appeal to Commissioner (Appeals) is not available against the order following DRP directions.
  5. Close with the conclusion in one line.

Common mistakes in Revisional Powers and Dispute Resolution Alternatives

  • Treating every assessee as eligible for the DRP

    Students remember the forum but not the eligibility test.

    Fix: Always check section 275(17) first: TPO variation, non-resident (not a company) or foreign company.

  • Saying objections go only to the DRP

    Students overlook the dual filing.

    Fix: Write that objections are filed with the DRP and the Assessing Officer.

  • Believing the DRP can send the matter back for fresh enquiry

    Confusing the DRP with an appellate authority.

    Fix: Section 275(8) bars setting aside and directions for further enquiry and fresh order. It can only confirm, reduce or enhance.

  • Forgetting the DRP can enhance

    Students assume an objection can only help the assessee.

    Fix: Mention section 275(9): it can consider matters not raised by the assessee, so advise on the risk.

  • Advising an appeal to Commissioner (Appeals) after DRP directions

    Students skip section 357 exclusions.

    Fix: Note that orders passed in pursuance of DRP directions are excluded from section 357(d) and (e).

  • Confusing revision with appeal

    Both seek to correct an order.

    Fix: Appeal is the assessee's remedy to an appellate authority. Revision is a supervisory power of a senior authority over an order.

Worked examples

Example 1

Pinecrest Inc., a foreign company, receives a draft assessment order from the Assessing Officer proposing an upward variation. Advise on the options and the timeline.

Show the solution
  1. A foreign company is an eligible assessee under section 275(17)(b)(ii), and the variation is prejudicial, so the draft order is required under section 275(1).
  2. Within 30 days of receipt, it may accept the variation or file objections with the DRP and the Assessing Officer.
  3. If it accepts or files no objection in time, the Assessing Officer completes the assessment on the draft order within one month from the end of the month of acceptance or expiry of the objection period.
  4. If it objects, the DRP hears it and the Assessing Officer, may make further enquiry, and issues written reasoned directions within nine months from the end of the month in which the draft order was forwarded.
  5. The directions bind the Assessing Officer, who completes the assessment within one month from the end of the month of receipt of directions, without a further hearing.

Answer: Pinecrest may accept or object within 30 days. Objections go to both the DRP and the Assessing Officer. DRP directions bind the Assessing Officer, and the final order follows within one month from the end of the month of receipt.

Example 2

After DRP directions, the Assessing Officer passes a final order against Meridian Ltd., a foreign company. Its CS asks if it can appeal to the Commissioner (Appeals). Also, can the DRP send the case back to the Assessing Officer for fresh enquiry?

Show the solution
  1. Section 357(d) lets an assessee appeal against certain assessment orders, but excludes an order passed in pursuance of directions of the DRP.
  2. Section 357(e) has the same exclusion for assessment, reassessment or recomputation orders under section 279.
  3. So an appeal to the Commissioner (Appeals) does not lie against this final order.
  4. On the second question, section 275(8) says the DRP shall not set aside any proposed variation or issue any direction for further enquiry and passing of the assessment order.
  5. The DRP may confirm, reduce or enhance the variations.

Answer: No appeal lies to the Commissioner (Appeals) against the order passed in pursuance of DRP directions. The DRP cannot remand the case. It can only confirm, reduce or enhance the variations.

Exam tips

  • Open every DRP answer with the eligibility test. It earns marks quickly.
  • Quote the 30-day, nine-month and one-month limits precisely, with what each is counted from.
  • Link section 275 with section 357 to show the effect on the appeal route.
  • For revision, explain the concept and the contrast with appeal, and avoid section numbers you are not sure of.
  • End case answers with a clear, practical recommendation.

Practice questions from Appeals

Revisional Powers and Dispute Resolution Alternatives: frequently asked questions

What is the difference between appeal and revision under income tax?

An appeal is filed by the assessee before an appellate authority against an order. Revision is a supervisory power of a senior authority, such as the Principal Commissioner, to examine and correct an order. Always state who starts the process and who decides.

Who can go to the Dispute Resolution Panel?

Only an eligible assessee. That means a person whose variation arises from the Transfer Pricing Officer's order under section 166(6), or any non-resident (not being a company), or any foreign company. Persons under section 292(1) or section 295 are excluded.

What is the time limit for objecting to a draft order?

The eligible assessee must accept the variations or file objections within thirty days of receiving the draft order. Objections go to the DRP and the Assessing Officer.

Are DRP directions binding?

Yes. Every direction issued by the DRP is binding on the Assessing Officer. The Assessing Officer must complete the assessment in conformity with them.

Can I appeal to the Commissioner (Appeals) after DRP directions?

Not against the order passed in pursuance of those directions. Section 357 excludes such orders from the listed appealable assessment orders.