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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 to a draft order under section 275 of the Income-tax Act, 2025. Which statement about its powers is correct?

The Panel may confirm, reduce or enhance the proposed variations, but it cannot set aside any variation or issue directions for further enquiry and passing of the assessment order. Its enhancement power also covers matters arising from the assessment proceedings that the assessee did not raise.

  1. AIt may confirm, reduce or enhance the variations, but may not set aside a variation or direct further enquiry and passing of the assessment orderCorrect
  2. BIt may set aside any variation and direct the Assessing Officer to make fresh enquiry and pass a new order
  3. CIt may only confirm or reduce variations and has no power to enhance them
  4. DIt may enhance variations only on matters raised by the assessee in his objections

Explanation

Section 275(8) lets the Panel confirm, reduce or enhance variations, but bars it from setting aside a variation or directing further enquiry and passing of the assessment order. Section 275(9) extends enhancement to matters not raised by the assessee, so the third and fourth options are wrong. The second option contradicts the bar in section 275(8).

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