The Dispute Resolution Panel

A non-resident, or a company whose transfer prices have been adjusted, does not receive a final assessment order first. It receives a draft order. It then has 30 days to choose one of two routes. It may accept the draft and keep the ordinary first appeal to the Commissioner (Appeals). Or it may object before the Dispute Resolution Panel, a collegium of three Commissioners whose directions bind the Assessing Officer, and then go straight to the Tribunal. The choice is made once, against a short deadline. This guide sets out who is eligible, what the draft order triggers, and the time limits the Panel and the Assessing Officer work to.

Which Act governs which years

The Panel is set up under section 144C of the Income-tax Act, 1961, for assessments of AY 2026-27 and earlier years. Under the Income-tax Act, 2025 it is section 275, for tax year 2026-27 onwards. The 2025 Act’s savings provision, section 536(2)©, keeps the 1961 Act in force for assessments of tax years beginning before 1 April 2026, “as per the procedure specified in the repealed Income-tax Act”. Every draft order now being issued, and every reference now pending before a Panel, is therefore a section 144C matter. Section 275 cases will arise only once assessments of tax year 2026-27 begin.

Point	1961 Act, s.144C	2025 Act, s.275
Draft order	(1)	(1)
30 days to accept or object	(2)	(2)
Order on acceptance or no objection	(3), (4)	(3), (4)
Directions, powers	(5) to (11)	(5) to (12)
Nine-month limit for directions	(12)	(13)
Final order after directions	(13)	(14)
Eligible assessee	(15)(b)	(17)(b)

Who is an eligible assessee

Under section 144C(15)(b), an eligible assessee is:

• any person in whose case the proposed variation “arises as a consequence of the order of the Transfer Pricing Officer” under section 92CA(3); and
• “any non-resident not being a company, or any foreign company”.

A resident company with a transfer-pricing adjustment, a foreign company, and a non-resident individual all qualify. A resident individual with no transfer-pricing adjustment does not. Section 275(17)(b) of the 2025 Act is the same, with the Transfer Pricing Officer’s order under section 166(6).

The section does not apply in three cases:

• an assessment passed with the Principal Commissioner’s approval under the GAAR provision in section 144BA(12) (section 144C(14A); section 275(16));
• persons and proceedings under the block-assessment chapter, Chapter XIV-B. The Finance (No. 2) Act, 2024 excluded these from 1 September 2024 (proviso to section 144C(15)(b) and section 144C(16)); the 2025 Act excludes them in section 275(18) and (19);
• variations that are not prejudicial to the assessee. The duty to send a draft arises only where the Assessing Officer “proposes to make … any variation which is prejudicial to the interest of such assessee” (section 144C(1)).

The draft order and the 30-day choice

Under section 144C(1), the Assessing Officer “shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment”. In faceless cases the National Faceless Assessment Centre serves the draft. Rule 176(2)(u) and (y) of the Income-tax Rules, 2026 state this for 2025 Act cases: the assessee files acceptance with the Centre, or files objections before the Panel and the Centre.

Within 30 days of receiving the draft, the assessee may do one of two things (section 144C(2)):

1. File acceptance of the variations with the Assessing Officer. The Assessing Officer then completes the assessment on the basis of the draft. The same happens if no objection is filed in time (section 144C(3)). The final order follows within one month from the end of the month in which the acceptance is received or the 30 days expire (section 144C(4)). That order is appealable to the Commissioner (Appeals) in the usual way.
2. File objections with both the Panel and the Assessing Officer. The final order will then follow the Panel’s directions. It is excluded from appeal to the Commissioner (Appeals) by section 246A(1), and it goes to the Tribunal under section 253(1)(d).

Section 144C does not provide for extending the 30 days.

Filing objections: Form 35A

Objections are filed under rule 4 of the Income-tax (Dispute Resolution Panel) Rules, 2009 (Notification No. 84/2009, 20 November 2009), in Form No. 35A. As notified, rule 4 provides:

• the objections may be filed “in person or through his agent within the specified period in Form No. 35A”, in English, and presented to the secretariat of the Panel (rule 4(1) and (2));
• they are to be filed in paper-book form in quadruplicate, with four authenticated copies of the draft order and the evidence relied on (rule 4(3));
• additional evidence not filed before the Assessing Officer goes in a separate application stating the reasons, not in the paper book (proviso to rule 4(3)(b)).

No user manual or FAQ for Form 35A could be found in the e-filing portal’s help section (incometax.gov.in/iec/foportal/help), which does carry one for Form 35. No notification amending rule 4 was located either. The filing mode and paper-book requirement stated above are therefore those of rule 4 as notified in 2009.

Form 35A asks for the Assessing Officer, the section under which the draft was sent, the date of service of the draft, and then, issue by issue, whether the assessee agrees with the facts as modified by the Assessing Officer and, if not, the reasons and evidence.

For 2025 Act cases, the Income-tax Rules, 2026 do not themselves prescribe a form for objections to the Panel. Section 536(2)(j) of the 2025 Act continues any rule made under the 1961 Act “so far as it is not inconsistent with the corresponding provisions” of the new Act. At the time of writing, no rules under section 275(15) had been notified. The Rules, 2026 contain none; they mention the Panel only in the faceless-assessment procedure of rule 176. Whether the 2009 Rules carry over to section 275 through section 536(2)(j) has not been settled by any notification.

What the Panel does

• Hearing. No direction may be issued unless the assessee, or the Assessing Officer, has been heard on directions prejudicial to it (section 144C(11)).
• Enquiry. The Panel may make further enquiry itself, or have it made by any income-tax authority (section 144C(7)).
• Powers. It “may confirm, reduce or enhance the variations proposed in the draft order”. It may not “set aside any proposed variation or issue any direction … for further enquiry and passing of the assessment order” (section 144C(8)). Its power to enhance includes “any matter arising out of the assessment proceedings relating to the draft order”, whether or not the assessee raised it (Explanation to section 144C(8)). An objection can therefore lead to a higher figure.
• Majority. Differences among the three members are decided by majority (section 144C(9)).
• Binding effect. Directions bind the Assessing Officer (section 144C(10)).

The time limits

• Directions may not be issued “after nine months from the end of the month in which the draft order is forwarded to the eligible assessee” (section 144C(12); section 275(13)). A draft forwarded on 10 January 2027 gives the Panel until 31 October 2027.
• Final order after directions. The Assessing Officer completes the assessment “in conformity with the directions … without providing any further opportunity of being heard”, within one month from the end of the month in which the directions are received (section 144C(13); section 275(14)).

How these periods relate to the ordinary time limit. Whether the time taken by the Panel had to fit within the ordinary limitation for assessment in section 153 (or section 153B), or ran in addition to it, was long litigated. The Finance Act, 2026 settled it by statute. It inserted sub-sections (4A), (4B), (13A) and (13B) into section 144C, deemed to have been inserted from 1 April 2009 (sections 153) and 1 October 2009 (section 153B). Each opens “Notwithstanding anything contained in any judgment, order or decree of any court”. Each provides that “where a draft of the proposed order of assessment … is forwarded within the time period allowed under section 153” (or 153B), the further time for the final order “shall be governed and shall always be deemed to have been governed” by section 144C(4), or by sub-sections (12) and (13). The draft must therefore issue within the section 153 or 153B period. After that, the Panel’s nine months and the Assessing Officer’s one month run under section 144C itself.

For the 2025 Act, the same Finance Act substituted section 275(4) and (14), adding a clause (b) to each to the same effect. It also substituted section 286(2), whose clause (b) provides that the draft order “shall be made at any time up to the time limit of assessment, reassessment or recomputation”. Section 286(2)(a) adds twelve months to the assessment time limit where a reference is made to the Transfer Pricing Officer.

What can be changed after filing

Additional grounds may be urged before the Panel with its permission (rule 7(4) of the 2009 Rules). Additional evidence may be called for or permitted, with reasons recorded (rule 9). The Panel may rectify a mistake apparent in its directions, on its own or on an application (rule 13). The final order passed on the directions is appealed to the Tribunal under section 253(1)(d), or section 362(1)(d) of the 2025 Act, within two months from the end of the month in which it is communicated. Rule 14 of the 2009 Rules, as notified, names Form No. 36B for that appeal. Rule 47(1) of the Income-tax Rules, 1962, however, prescribes Form No. 36 for every appeal under section 253(1) or (2), which includes clause (d). For 2025 Act cases, rule 193(1) of the Rules, 2026 prescribes Form No. 115 for every appeal under section 362(1) or (2), including DRP-directed orders under section 362(1)(d). See Appealing to the ITAT. The DRP route has no Commissioner (Appeals) stage. Recovery pending the Tribunal appeal is governed by stay before the Tribunal.

The procedure in order

1. On receiving a draft order, note the date of receipt. The 30 days run from it.
2. Check eligibility: a transfer-pricing variation, or a non-resident or foreign company, with no GAAR approval order and no block-assessment proceeding.
3. Decide within 30 days. Accepting the draft keeps the Commissioner (Appeals) route; objecting moves the case to the Panel and then the Tribunal.
4. If objecting, file Form 35A with the Panel and a copy with the Assessing Officer (or the National Faceless Assessment Centre), with the draft order, the evidence and any separate additional-evidence application.
5. Attend the Panel’s hearing. Any direction may enhance as well as reduce.
6. Note the nine-month outer limit for directions, counted from the end of the month the draft was forwarded.
7. On the final order, file the Tribunal appeal within two months from the end of the month it is communicated, and apply for stay if needed.

The next guide steps back to the change of statute behind all of these provisions: The Income-tax Act, 2025: What Changes from 1 April 2026.