When Judges Disagree: The Shelf Drilling Case And The Road Ahead

The scheme of review by Dispute Resolution Panel ('DRP') was introduced in the Income-tax Act, 1961 ('IT Act') vide Finance Act, 2009, with effect from 1 April 2009. The well-founded intent behind the scheme was to safeguard non-residents and those subjected to transfer pricing assessments from arbitrary demands by providing a review mechanism from a panel of three Commissioners before the final orders were passed. The review process was merged with the existing assessment regime compelling the assessing officers to pass the draft orders to give the taxpayers an option to seek review from DRP before the final orders are framed.

While the implementation of DRP was mostly seamless, with the officers usually adhering to the legislative mandate of passing draft orders in cases of eligible assessees wherein variations were proposed, the computation of period of limitation for completion of assessment process in cases involving review by DRP has been a subject matter of