Scope of DRP is restricted only to adjustments proposed in the draft assessment order and not beyond

Further, the High Court also held that the DRP does not have the power under Section 144C of the Act to issue a direction to the Assessing Officer (AO) to conduct further inquiry for passing the assessment order. HC held that this was wholly without jurisdiction in view of the provisions of section 144C of the Act, which expressly provides that the DRP cannot issue any direction for further enquiry and passing of the assessment order. Further, it was observed that if such orders and directions are permitted to be allowed they would defeat the very object with which the alternate dispute resolution is provided.

With regard to the issue of enhancement of the powers of the DRP, the HC relied on the principle laid down by the Supreme Court in the assessee’s own case, wherein it was held that, in interpreting the provisions of the Act, the Act has to be read as one integrated code. Accordingly, it was observed that the various sub­sections of section 144C cannot be read de hors the powers under section 144C(8) of the Act, which expressly provides that the powers of the DRP are restricted to the variations proposed in the draft order. Further, it was observed that if the DRP