CA Final · Direct Tax Laws & International Taxation · Dispute Resolution
Meridian Ltd, a foreign company, received a draft order proposing an addition of Rs 40 lakh. It filed objections. The Dispute Resolution Panel, after hearing, is considering the following. Which action is permitted under section 275(8) and (9)?
The Panel may enhance the variation, and for that it may consider any matter arising out of the assessment proceedings relating to the draft order even if the assessee never raised it. It cannot set aside a variation or direct fresh enquiry and a fresh order, and its directions bind the Assessing Officer.
- ASetting aside the proposed variation and directing the AO to conduct fresh enquiry and pass a fresh order
- BEnhancing the variation, including by considering a matter arising out of the assessment proceedings that Meridian did not raiseCorrect
- CIssuing directions that are not binding on the Assessing Officer
- DIssuing directions without giving the assessee any opportunity of being heard
Explanation
Section 275(8) lets the Panel confirm, reduce or enhance the variations, and 275(9) extends the enhancement power to any matter arising from the assessment proceedings relating to the draft order, even if the assessee did not raise it. The Panel cannot set aside a variation or direct further enquiry and a fresh order. Its directions are binding under 275(11), and hearing is mandatory under 275(12).
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