Comparison of section 274 "Reference to Principal Commissioner or Commissioner in certain cases." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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.... and determination of consequences under Chapter XI. It matters because it creates a multi-tiered, internal administrative route for invoking anti-avoidance provisions, affecting taxpayers under assessment or reassessment and income-tax authorities. Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: Clause 274 of the Income Tax Bill, 2025 and cross-reference to Chapter XI and section 159 (international assistance). The clause governs references by the AO to the Principal Commissioner or Commissioner and onward to an Approving Panel for declaration of an arrangement as an "impermissible avoidance arrangement" and determination of its tax consequences. Definitions of "impermissible avoidance arr....

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....without hearing the assessee and AO where the directions are prejudicial to either interest of the assessee or revenue. The Approving Panel has investigatory powers: it may order further inquiries (including via authorities under agreements referred in section 159), call for records, and require documents from the assessee. Panel decisions are by majority. Directions of the Principal Commissioner/Commissioner or Approving Panel are binding on the assessee and the Principal Commissioner/Commissioner and subordinate income-tax authorities. No appeal lies against Approving Panel directions. The Central Government shall constitute one or more Approving Panels (three members including a Chairperson who is or has been a High Court judge; one memb....

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....section (6) shall be issued unless opportunity of being heard is given to the assessee and the AO where directions are prejudicial to interests (sub-section (7)). * Time-limits for Panel: Approving Panel to issue directions within six months from end of month in which reference received, subject to specified exclusions (sub-sections (13)-(15)). * Exclusions to time computation: periods where Panel directs inquiries under agreements referred in section 159 (limited to one year or duration of information retrieval) and periods of judicial stay (sub-section (14)). * Binding effect and finality: Directions of the Panel are binding and not appealable (sub-sections (16) and (17)). Illustrations * Example 1: An AO detects a complex arrang....

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.... the Board to make rules for constitution and functioning of the Panel. Practical Implications * Compliance and risk areas: Taxpayers subject to assessment/reassessment face a structured process that could result in binding, non-appealable determinations that may span multiple tax years. There is a heightened procedural risk where an AO refers matters upwards; once the Approving Panel issues directions, those are binding and not subject to appeal under the Act. The text makes clear that invoking Chapter XI requires higher-level concurrence, concentrating decision-making at senior and quasi-judicial levels. * Record-keeping/evidence points: The provision contemplates inquiries, requests for documents, and international information excha....

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.... * Effective date, definitions of key terms (e.g., "impermissible avoidance arrangement"), and appeal or judicial review pathways beyond the Act's internal bar are Not stated in the document. Differences between Document 1 (Section 274 of Income-tax Act, 2025) and Document 2 (Clause 274 of Income Tax Bill, 2025 - Old Version) and Practical Impact Provision/Clause Difference in Text Practical Impact Terminology in notices (sub-section (3)) Doc1 uses the phrase "within the time specified in such notice issued under sub-section (2)"; Doc2 says "within the time specified in the notice issued under sub-section (2)". Purely stylistic; no substantive change in meaning or effect. Reference to other tax years (sub-section (11)(b)) Do....