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

A resident individual's specified order proposes variations of Rs 8 lakh. The order is not based on search, requisition, survey or treaty information, and the return showed total income of Rs 46 lakh. For another assessee, the specified order has aggregate variations of Rs 12 lakh with return income of Rs 30 lakh. Under section 379 of the Income-tax Act, 2025, which is correct?

Only the first assessee qualifies. Section 379(4) needs variations of at most Rs 10 lakh, no search, requisition, survey or treaty-information basis, and return income of at most Rs 50 lakh. The second assessee's Rs 12 lakh variations breach the limit despite low income.

  1. ABoth can opt for the Dispute Resolution Committee
  2. BNeither can opt
  3. COnly the first can opt; the second fails because variations exceed Rs 10 lakhCorrect
  4. DOnly the second can opt because its return income is lower

Explanation

Section 379(4) requires aggregate variations not exceeding Rs 10 lakh, no search, requisition, survey or treaty-information basis, and return income not above Rs 50 lakh. The first assessee meets all three conditions: Rs 8 lakh, no excluded basis and Rs 46 lakh. The second has variations of Rs 12 lakh, which exceed the limit, so low income does not help.

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