Budget 2020-21 + FINANCE BILL, 2020

Amendment in Dispute Resolution Panel (DRP).

Section 144C of the Act provides that in case of certain eligible assessees, viz., foreign companies and any person in whose case transfer pricing adjustments have been made under sub-section (3) of section 92CA of the Act, the Assessing Officer (AO) is required to forward a draft assessment order to the eligible assessee, if he proposes to make any variation in the income or loss returned which is prejudicial to the interest of such assessee. Such eligible assessee with respect to such variation may file his objection to the DRP, a collegium of three Principal Commissioners or Commissioners of Income-tax. DRP has nine months to pass directions which are binding on the AO.

It is proposed that the provisions of section 144C of the Act may be suitably amended to:-

(A) include cases, where the AO proposes to make any variation which is prejudicial to the interest of the assessee, within the ambit of section 144C;

(B) expand the scope of the said section by defining eligible assessee as a non-resident not being a company, or a foreign company.

This amendment will take effect from 1st April, 2020. Thus, if the AO proposes to make any variation after this date, in case of eligible assessee, which is prejudicial to the interest of the assessee, the above provision shall be applicable.

[Clause 70]

 

 

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Budget 2020-21 + FINANCE BILL, 2020

Dispute Resolution Panel expansion: added non-resident taxpayers can seek DRP review when AO proposes prejudicial assessment variations. Amendment expands the Dispute Resolution Panel (DRP) procedure to require the Assessing Officer to forward a draft assessment order when proposing any variation prejudicial to the assessee, permitting the taxpayer to file objections with the DRP whose binding directions govern the AO. The definition of eligible assessee is widened to include non-resident persons other than companies alongside foreign companies and cases with transfer pricing adjustments.