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CA Final · Direct Tax Laws & International Taxation · Dispute Resolution

A draft order was forwarded on 12 June to an eligible assessee, who filed objections with the DRP. Which statement about the DRP's powers under the Income-tax Act, 2025 is correct?

The DRP may confirm, reduce or enhance the proposed variations, and its enhancement power extends to matters the assessee did not raise. However, it cannot set aside a variation or issue a direction for further enquiry and passing of the assessment order.

  1. AThe DRP may set aside a proposed variation and direct the Assessing Officer to make a fresh enquiry
  2. BThe DRP may confirm, reduce or enhance the variations, but cannot set aside a variation or direct further enquiry by the Assessing OfficerCorrect
  3. CThe DRP may only confirm or reduce the variations and has no power to enhance them
  4. DThe DRP may enhance a variation only on a matter specifically raised by the assessee in its objections

Explanation

Section 275(8) lets the DRP confirm, reduce or enhance the variations, but bars it from setting aside a variation or directing further enquiry and passing of the assessment order. Under section 275(9), its enhancement power also covers matters not raised by the assessee, so the other options are wrong.

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