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CMA Final · Direct Tax Laws and International Taxation · Assessment Procedure including Dispute Resolution Process

A Dispute Resolution Panel is examining objections on a draft assessment order forwarded to a foreign company. Which of the following can the panel do under section 275 of the Income-tax Act, 2025?

The panel can enhance a variation and may consider any matter arising out of the assessment proceedings relating to the draft order, even if the assessee did not raise it. It cannot set aside variations, must hear the assessee, and its directions bind the Assessing Officer.

  1. ASet aside a proposed variation and direct the Assessing Officer to make fresh enquiry and pass a new order
  2. BEnhance a variation by considering a matter arising from the assessment proceedings even if the assessee did not raise itCorrect
  3. CIssue directions without giving the assessee any opportunity of being heard
  4. DIssue directions that are advisory and not binding on the Assessing Officer

Explanation

Section 275(8) lets the panel confirm, reduce or enhance variations, and 275(9) extends enhancement to matters not raised by the assessee. It cannot set aside a variation or direct further enquiry for a fresh order. A hearing is mandatory under 275(12), and directions bind the AO under 275(11).

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