CA Final · Direct Tax Laws & International Taxation · Dispute Resolution
Under the Income-tax Act, 2025, a Dispute Resolution Panel hears objections of Zenith Global Inc., a foreign company, against a draft order. The draft order proposes an addition of Rs. 60 lakh on one issue. The Panel finds the evidence incomplete and also notices another item of Rs. 20 lakh arising from the same assessment proceedings that the assessee never raised. Which course is permitted by section 275?
The Panel may confirm, reduce or enhance the variation and can consider the unraised Rs. 20 lakh matter arising from the assessment proceedings. It cannot set aside a variation or direct further enquiry for the AO to pass the order, per section 275(8) and (9).
- ASet aside the Rs. 60 lakh addition and direct the AO to make fresh enquiry and reassess
- BConfirm, reduce or enhance the variation, and consider the Rs. 20 lakh matter arising from the proceedings even though the assessee did not raise itCorrect
- COnly confirm or reduce the variation, as enhancement requires a separate notice by the AO
- DDirect further enquiry by the AO and pass the assessment order after the enquiry
Explanation
Section 275(8) lets the Panel confirm, reduce or enhance variations, but not set aside any variation or direct further enquiry and passing of the order. Section 275(9) extends enhancement to matters arising from the proceedings even if the assessee did not raise them. The Panel itself may make or cause further enquiry before issuing directions under 275(7).
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