What Is The Full Form Of DRP In Income Tax?
DRP full form in income tax is Dispute Resolution Panel. It’s a group set up by the Central Board of Direct Taxes (CBDT) in India under Section 144C of the Income Tax Act, 1961. The DRP group consists of three commissioners who look into complaints related to the first notice of tax assessment given by tax officers. This panel is principally there to sort out disagreements between taxpayers and the income tax department, specifically where the subject matter relates to complex transfer pricing that involves international or significant domestic transactions which may change the tax amounts that taxpayers owe.
Formation and Functioning:
The main job of the DRP is to fairly examine the issues taxpayers have with the preliminary orders from tax officers. Taxpayers who can ask the DRP for help are those dealing with adjustments in transfer pricing and international deals. Within 30 days of the day after the date of the 1st assessment notice, the taxpayer shall be allowed to show their disagreements to the DRP. The panel will consider these matters and evidence, thereafter giving directions to the tax officer for completing the tax assessment within the stipulated period, following the guidance of DRP.
What needs to be submitted?
Taxpayers must provide a detailed objection that includes reasons for disagreement, facts given to the tax officer, any changes made by the officer, legal arguments, and related court decisions. All these are detailed to enable the DRP to easily understand the case and make well-informed decisions.