Section 275 Income Tax Act 2025: How to File Objections Before the Dispute Resolution Panel?
Section 275 of the Income-tax Act, 2025 provides an alternative procedure for specified taxpayers to object to prejudicial variations proposed in a draft assessment order. It establishes the Dispute Resolution Panel (DRP) procedure, the hearing safeguards, statutory deadlines and the binding effect of DRP directions.
Who can approach the DRP under Section 275?
Section 275(17)(b), read with Section 275(18), identifies the eligible assessee. The categories include:
- Any person whose proposed assessment variation arises as a consequence of an order of the Transfer Pricing Officer under Section 166(6).
- A non-resident person who is not a company.
- A foreign company.
These categories are subject to the statutory exclusions for persons referred to in Section 292(1) and other persons referred to in Section 295. Eligibility depends on the actual proceedings and the relevant statutory conditions; it is not a general remedy available for every assessment.
How does the draft assessment and objection process work?
Section 275(1): Draft assessment order
Where the Assessing Officer proposes a variation prejudicial to an eligible assessee, the officer must first forward a draft proposed assessment order rather than immediately completing the assessment.
Section 275(2): 30 days to accept or object
Within 30 days of receipt of the draft order, the eligible assessee must either communicate acceptance to the Assessing Officer or file objections to the proposed variation with both the DRP and the Assessing Officer.
Sections 275(3) and 275(4): If the taxpayer accepts or does not object
If the taxpayer accepts the variation or no objection is received within the specified period, the Assessing Officer completes the assessment on the basis of the draft order. The assessment order must be passed within one month from the end of the month in which acceptance is received or the objection period expires, as applicable, notwithstanding Section 286.
What powers does the DRP have?
Sections 275(5) to 275(12) establish the DRP's powers and procedural safeguards:
- Reasoned written directions: The DRP issues written directions stating the points for determination, its decisions and reasons.
- Further inquiry: The DRP may inquire further itself or require an income-tax authority to investigate and report.
- Scope of variation: The DRP may confirm, reduce or enhance the variations proposed in the draft order.
- No remand for fresh assessment: The DRP cannot set aside a proposed variation or direct a further inquiry followed by a new assessment order.
- Enhancement beyond objections: It may consider a matter arising from the assessment proceedings even if the eligible assessee did not raise that matter.
- Majority decision: If members differ, the majority opinion determines the point.
- Binding directions: Directions issued by the DRP bind the Assessing Officer.
- Opportunity of hearing: Before prejudicial directions, the DRP must provide an opportunity of hearing to the assessee or the Assessing Officer, as appropriate.
What are the statutory time limits?
| Stage | Time limit | Provision |
|---|---|---|
| Acceptance or objections to draft order | Within 30 days from receipt of draft order | 275(2) |
| Final order where accepted or no objections filed | Within one month from end of month of acceptance or expiry of objection period | 275(4) |
| DRP directions | Not later than nine months from end of month in which draft order was forwarded | 275(13) |
| Final assessment following DRP directions | Within one month from end of month in which directions are received | 275(14) |
After receipt of DRP directions, the Assessing Officer must complete the assessment in conformity with those directions without giving the taxpayer another hearing at that stage. The right to be heard before prejudicial DRP directions remains protected under Section 275(12).
When does Section 275 not apply?
- Under Section 275(16), it does not apply to an assessment or reassessment order passed with prior approval of the Principal Commissioner or Commissioner under Section 274(12).
- Under Section 275(18), eligible assessees do not include persons covered by Section 292(1) or other persons referred to in Section 295.
- Under Section 275(19), it does not apply to proceedings under Chapter XVI-B.
Relevant statutory definitions
Practical illustrations
Example 1 - Transfer pricing: An Indian company receives a draft order proposing an addition following a Transfer Pricing Officer's order under Section 166(6). If the statutory eligibility conditions are met, it may object to the DRP and the Assessing Officer within 30 days.
Example 2 - Foreign company: A foreign company receives a draft order proposing disallowance of an expense. It may use the DRP procedure as an eligible assessee, subject to the statutory exclusions.
Example 3 - No objections: An eligible assessee receives a draft order but files no objections within 30 days. The Assessing Officer proceeds to finalise the assessment in accordance with Sections 275(3) and 275(4).
Example 4 - Enhancement: During objection proceedings, the DRP identifies another issue arising from the same assessment proceedings. Section 275(9) permits consideration of such an issue when exercising enhancement powers, subject to the hearing safeguards.
Frequently asked questions
Is the DRP available to every taxpayer?
No. Section 275 defines the eligible assessee by category and contains specific exclusions.
Where must DRP objections be filed?
Section 275(2)(b) requires filing objections with both the Dispute Resolution Panel and the Assessing Officer within 30 days of receipt of the draft order.
Can the DRP increase a proposed addition?
Yes. Section 275(8), read with Section 275(9), permits enhancement, subject to the statutory hearing safeguard.
Are DRP directions binding on the Assessing Officer?
Yes. Section 275(11) expressly makes them binding.
How soon must the DRP issue directions?
Section 275(13) requires directions within nine months from the end of the month in which the draft order was forwarded to the eligible assessee.
Does Section 275 of the 2025 Act concern penalty limitation?
No. Section 275 of the 2025 Act concerns the Dispute Resolution Panel. The similarly numbered provision in the 1961 Act concerns limitation for penalties; the corresponding DRP provision in the 1961 Act was Section 144C.
Official legal references
Read the Income Tax Department's Section 275 text and the official Income Tax Act 2025 resources. For connected provisions, see Section 270 (Assessment), Section 273 (Faceless Assessment) and Section 274 (GAAR references).
Updated: 11 November 2026. This article provides general legal information. Confirm the statutory text, rules, notifications and transition provisions applicable to the relevant tax year and proceedings.