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

Meridian Exports Ltd, a foreign company, receives a draft order of assessment from the Assessing Officer under section 275 of the Income-tax Act, 2025 proposing a prejudicial variation. It neither files acceptance nor objections within the permitted period. What is the consequence?

The Assessing Officer completes the assessment on the basis of the draft order. Where the eligible assessee files neither acceptance nor objections within thirty days of receiving the draft, section 275(3) directs completion of assessment on that draft, so nothing lapses and no panel hearing arises.

  1. AThe Assessing Officer must complete the assessment on the basis of the draft orderCorrect
  2. BThe Dispute Resolution Panel must hear the company suo motu
  3. CThe draft order lapses and no assessment can be made
  4. DThe Assessing Officer must issue a fresh draft order

Explanation

Under section 275(3)(b), where no objection is received within thirty days of receipt of the draft order, the Assessing Officer completes the assessment on the basis of the draft order. The option saying the draft lapses is wrong because the Act has no such consequence.

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