Reference to Dispute Resolution Panel
[Section-275 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 275(1) of Income Tax Act 2025
275(1) The Assessing Officer shall, irrespective of anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee, if he proposes to make any variation which is prejudicial to the interest of such assessee.
Section 275(2) of Income Tax Act 2025
275(2) On receipt of the draft order, the eligible assessee shall, within thirty days of its receipt,—
- 275(2)(a) file his acceptance of the variations to the Assessing Officer; or
- 275(2)(b) file his objections, if any, to such variation with,—
- (i) the Dispute Resolution Panel; and
- (ii) the Assessing Officer.
Section 275(3) of Income Tax Act 2025
275(3) The Assessing Officer shall complete the assessment on the basis of the draft order, if—
- (a) the assessee intimates to the Assessing Officer the acceptance of the variation; or
- (b) no objection is received within the period specified in sub-section (2).
Section 275(4) of Income Tax Act 2025
275(4) The Assessing Officer shall, irrespective of anything contained in section 286, pass the assessment order under sub-section (3) within one month from the end of the month in which,—
- (a) the acceptance is received; or
- (b) the period of filing of objections under sub-section (2) expires.
Section 275(5) of Income Tax Act 2025
275(5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for guidance of the Assessing Officer to enable him to complete the assessment.
Section 275(6) of Income Tax Act 2025
275(6) The Dispute Resolution Panel shall issue the directions as referred to in sub-section (5), in writing, stating the points of determination, the decision thereon and the reason for such decision.
Section 275(7) of Income Tax Act 2025
275(7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),—
- (a) make such further enquiry, as it thinks fit; or
- (b) cause any further enquiry to be made by any income-tax authority, and report the result of the same to it.
Section 275(8) of Income Tax Act 2025
275(8) The Dispute Resolution Panel may, confirm, reduce or enhance the variations proposed in the draft order, so however, that it shall not set aside any proposed variation, or issue any direction under sub-section (5) for further enquiry and passing of the assessment order.
Section 275(9) of Income Tax Act 2025
275(9) For the purposes of sub-section (8), the power of the Dispute Resolution Panel to enhance the variation shall include the power to consider any matter arising out of the assessment proceedings relating to the draft order, irrespective of the fact that such matter was not raised by the eligible assessee.
Section 275(10) of Income Tax Act 2025
275(10) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided as per the opinion of the majority of the members.
Section 275(11) of Income Tax Act 2025
275(11) Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer.
Section 275(12) of Income Tax Act 2025
275(12) No direction under sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee, and the Assessing Officer, on such directions which are prejudicial to the interest of the assessee, or the interest of the revenue, respectively.
Section 275(13) of Income Tax Act 2025
275(13) No direction under sub-section (5) shall be issued after nine months from the end of the month in which the draft order is forwarded to the eligible assessee.
Section 275(14) of Income Tax Act 2025
275(14) Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete, irrespective of anything to the contrary contained in section 286, the assessment without providing any further opportunity of being heard to the assessee, within one month from the end of the month in which such direction is received.
Section 275(15) of Income Tax Act 2025
275(15) The Board may make rules for the purposes of the efficient functioning of the Dispute Resolution Panel and expeditious disposal of the objections filed under sub-section (2) by the eligible assessee.
Section 275(16) of Income Tax Act 2025
275(16) The provisions of this section shall not apply to any assessment or reassessment order passed by the Assessing Officer with the prior approval of the Principal Commissioner or Commissioner as provided in section 274(12).
Section 275(17) of Income Tax Act 2025
275(17) In this section, subject to the provisions of sub-section (18),—
- 275(17)(a) “Dispute Resolution Panel” means a collegium comprising of three Principal Commissioners or Commissioners of Income-tax constituted by the Board for this purpose;
- 275(17)(b) “eligible assessee” means,—
- (i) any person in whose case the variation referred to in sub-section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under section 166(6);
- (ii) any non-resident (not being a company), or any foreign company.
Section 275(18) of Income Tax Act 2025
275(18) The eligible assessee referred to in sub-section (17) shall not include person referred to in section 292(1) or other person referred to in section 295.
Section 275(19) of Income Tax Act 2025
275(19) The provisions of this section shall not apply to any proceedings under Chapter XVI-B.
FAQs on Section 275 of Income Tax Act 2025
What is the purpose of forwarding a draft order to the eligible assessee under Section 275(1)?
The draft order is sent to give the eligible assessee an opportunity to accept or object to any variation proposed by the Assessing Officer that may be prejudicial to their interest.
Who qualifies as an “eligible assessee” under Section 275(17)?
An eligible assessee is (i) a person whose variation arises due to an order by the Transfer Pricing Officer under section 166(6), or (ii) a non-resident (not being a company) or a foreign company, excluding those covered under sections 292(1) or 295.
What are the options available to the eligible assessee upon receiving a draft order under Section 275(2)?
Within thirty days, the assessee can either accept the variations and inform the Assessing Officer, or file objections to both the Dispute Resolution Panel and the Assessing Officer.
What happens if no objections are filed within the prescribed time under Section 275(3)?
If the assessee accepts the variation or does not object within 30 days, the Assessing Officer completes the assessment based on the draft order.
What is the timeline for passing the final assessment order if the assessee accepts or does not object under Section 275(4)?
The assessment order must be passed within one month from the end of the month in which the acceptance is received or the objection period expires.
What is the role of the Dispute Resolution Panel when objections are filed under Section 275(5)?
The Panel issues directions to the Assessing Officer for completing the assessment.
What should be included in the directions issued by the Dispute Resolution Panel under Section 275(6)?
The directions must be in writing and include the points of determination, the decisions made, and the reasons for such decisions.
Can the Dispute Resolution Panel conduct inquiries before issuing directions under Section 275(7)?
Yes, the Panel may conduct inquiries on its own or through any income-tax authority and use the findings in forming its directions.
What is the scope of powers of the Dispute Resolution Panel regarding variations under Section 275(8)?
The Panel may confirm, reduce, or enhance the variations in the draft order but cannot set aside any variation or direct further enquiry for assessment.
Can the Dispute Resolution Panel consider issues not raised by the assessee under Section 275(9)?
Yes, the Panel can consider any matter arising out of the assessment proceedings, regardless of whether the assessee raised it.
How are differences in opinion among Panel members resolved under Section 275(10)?
Differences are resolved based on the majority opinion of the Panel members.
Are the directions of the Dispute Resolution Panel binding on the Assessing Officer under Section 275(11)?
Yes, the Assessing Officer is bound by the directions issued by the Panel.
Is the assessee given a chance to be heard before directions are issued under Section 275(12)?
Yes, the assessee and the Assessing Officer must be given an opportunity to be heard before issuing any directions that may prejudice them.
What is the time limit for issuing directions by the Dispute Resolution Panel under Section 275(13)?
Directions must be issued within nine months from the end of the month in which the draft order was forwarded.
When must the final assessment be completed after receiving the directions under Section 275(14)?
The Assessing Officer must complete the assessment within one month from the end of the month in which the directions are received, without further hearing.
Can the Board make rules regarding the functioning of the Dispute Resolution Panel under Section 275(15)?
Yes, the Board can frame rules for efficient functioning and quick disposal of objections.
Are there any exclusions to the application of Section 275 under Section 275(16)?
Yes, this section does not apply if the assessment or reassessment is made with prior approval of the Principal Commissioner or Commissioner under section 274(12).
Who constitutes the Dispute Resolution Panel as defined in Section 275(17)(a)?
It is a collegium of three Principal Commissioners or Commissioners of Income-tax, constituted by the Board.
Are all non-residents considered eligible assessees under Section 275(17)(b)?
Only non-residents (not being a company) or foreign companies are eligible, excluding those covered under sections 292(1) and 295.
Does Section 275 apply to proceedings under Chapter XVI-B as per Section 275(19)?
No, it does not apply to any proceedings under Chapter XVI-B.
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