Section 144C

Dispute Resolution Panel

Extract of Income Tax Act of India for Section 144C

Section 144C of the Income Tax Act of 1961 introduces the Dispute Resolution Panel (DRP) concept to provide a mechanism for the speedy resolution of disputes relating to transfer pricing and international taxation. This section outlines the process for referring to the DRP, the DRP’s powers, and the procedures to be followed by both taxpayers and the tax authorities.

Section 144C(1): The Assessing Officer (AO) shall, in the first instance, forward a draft of the proposed order of assessment (if it is prejudicial to the interest of the eligible assessee) to the eligible assessee, in respect of whom any variation is proposed in the income or loss returned, on or after the 1st day of October 2009.

Section 144C(2): On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order, file his acceptance of the variations to the Assessing Officer or file his objections, if any, to such variations with,—

  • (a) the Dispute Resolution Panel; and
  • (b) the Assessing Officer.

Section 144C(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 variations; or
  • (b) no objections are received within the period specified in sub-section (2).

Section 144C(4): 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 the guidance of the Assessing Officer to enable him to complete the assessment.

Section 144C(5): 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 (4) for further inquiry and passing of the assessment order.

Section 144C(6): The Dispute Resolution Panel shall issue the directions referred to in subsection (5) after considering the following, namely:—

  • (a) draft order;
  • (b) objections filed by the assessee;
  • (c) evidence furnished by the assessee;
  • (d) report, if any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other authority;
  • (e) records relating to the draft order;
  • (f) evidence collected by, or caused to be collected by it; and
  • (g) result of any inquiry made by, or caused to be made by, it.

Section 144C(7): If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of most members.

Section 144C(8): Every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer.

Section 144C(9): 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 144C(10): Upon receipt of the directions issued under sub-section (5), the Assessing Officer shall, in conformity with the directions, complete 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 144C(11): For this section, the “Dispute Resolution Panel” is a collegium comprising three Commissioners of Income-tax constituted by the Board.

Section 144C(12): For this section, “eligible assessee” means—

  • (a) 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 sub-section (3) of section 92CA; and
  • (b) any foreign company.

Purpose and Objective of the Act

Section 144C’s primary objective is to provide an alternative dispute resolution mechanism for cases involving transfer pricing adjustments and international taxation issues. The Dispute Resolution Panel (DRP) aims to expedite the resolution process, reduce litigation, and ensure fairness in the assessment proceedings. It provides a forum for taxpayers to present their objections and seek redressal without going through the traditional appellate process.

Proper Reasoning

The introduction of the DRP under Section 144C is based on the following reasoning:

  1. Expedited Resolution: Providing a faster mechanism for resolving transfer pricing and international taxation disputes, thereby reducing the time and cost of prolonged litigation.
  2. Expert Guidance: Utilizing the expertise of senior tax officials (Commissioners of Income-tax) to provide well-informed directions and ensure fair assessments.
  3. Reduction of Litigation: Resolving disputes early can minimise the cases that proceed to the appellate authorities and courts.
  4. Transparency and Fairness: Ensuring taxpayers have a clear and structured process to raise objections and seek resolution, thereby promoting transparency and fairness in tax assessments.

Legal Recourse and Legal Proceedings

The legal recourse and proceedings under Section 144C are as follows:

  1. Draft Order: The Assessing Officer (AO) issues a draft assessment order to the eligible assessee if any variations are proposed in the returned income or loss.
  2. Objections by Assessee: The assessee can file objections to the draft order with both the DRP and the AO within thirty days of receiving it.
  3. DRP Directions: The DRP, after considering the draft order, objections, evidence, and reports, issues directions to the AO within nine months from the end of the month in which the draft order is forwarded to the assessee.
  4. Final Assessment Order: The AO completes the assessment by the directions of the DRP within one month of receiving the DRP’s directions.

Do’s and Don’ts


  • File objections to the draft order with the DRP and AO within the thirty-day period.
  • Ensure that all supporting evidence, documentation, and objections are submitted.
  • Cooperate with the DRP during the proceedings and provide any additional information or clarification required.
  • Seek professional advice to present your case before the DRP effectively.


  • Do not ignore the draft order or fail to file objections within the specified timeframe.
  • Avoid providing incomplete or inaccurate information in your objections.
  • Do not assume that the DRP will automatically rule in your favour; prepare a well-reasoned and documented case.
  • Avoid non-cooperation or delays in providing additional information requested by the DRP.


Section 144C of the Income Tax Act, 1961, introduces the Dispute Resolution Panel (DRP) as a mechanism to efficiently resolve transfer pricing and international taxation disputes. The DRP aims to expedite dispute resolution, reduce litigation, and ensure fairness in tax assessments by providing a structured process for taxpayers to raise objections and seek redressal. Understanding the provisions, objectives, and procedures associated with Section 144C is essential for taxpayers to navigate the DRP process and achieve favourable outcomes effectively. Proper documentation, timely filing of objections, and cooperation with the DRP are critical to successfully resolving disputes under this section.

Who Are We

CFO Angle provides specialized services in the areas of Business Finance, Banking, Legal and Insurance. We not only deliver high quality services, but also do it with utmost sensitivity to client’s constraints.

The trust and faith that our clients have in us means everything to us. Our success is defined by the quality of the relationships we build during the journey and the positive change we make in their businesses.

Our Achievements so far

Projects Done
Active clients
Hours of Work
our work

Our Clients

Our success is defined by the quality of the relationships we build during the journey and the positive change we make in their businesses.

get in touch

Contact Info

Contact CFO Angle AI Solutions for Advisory Services