Rule 199 of the Draft Income-tax Rules, 2026 provides definitions relevant to Rules 196 to 198 concerning dispute resolution under section 379. It defines “specified order” to include a draft order under section 275(1); an intimation under sections 270(1) or 399(1) where objections are raised; an order of assessment or reassessment (other than one passed pursuant to Dispute Resolution Panel directions); an order under section 287 enhancing assessment or reducing loss; and an order under section 398 subject to conditions. For section 398 orders, eligibility applies only where the aggregate variation does not exceed ₹10 lakh, the assessee’s returned income does not exceed ₹50 lakh, and the case does not arise from search, requisition, survey, or information received under section 159. The Rule further defines “specified conditions” for applicants, excluding persons detained under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 in certain circumstances; persons convicted under specified laws including the Bharatiya Nyaya Sanhita, 2023, the Unlawful Activities (Prevention) Act, the NDPS Act, the Prohibition of Benami Transactions Act, the Prevention of Corruption Act, and the Prevention of Money-laundering Act; persons prosecuted by income-tax authorities for offences under tax or related laws; persons notified under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992; and persons facing proceedings under the Black Money Act, 2015 for the relevant year. A “specified person” under section 379 is one who satisfies these prescribed conditions.
Extract of Rule No. 199 of Draft Income-tax Rules, 2026
Rule 199
Definitions.
For the purposes of rule 196 to 198,—
(i) the “specified order” in relation to a dispute under section 379 of the Act means:
(a) a draft order as referred to in section 275 (1) of the Act;
(b) an intimation under section 270(1) or section 399(1) of the Act of the Act, where the assessee or the deductor or the collector objects to the adjustments made in the said order;
(c) an order of assessment or reassessment, except an order passed in pursuance of directions of the Dispute Resolution Panel;
(d) an order made under section 287 of the Act having the effect of enhancing the assessment or reducing the loss; or
(e) an order made under section 398 of the Act and in respect of which the following conditions are satisfied, namely:—
A. the aggregate sum of variations proposed or made in such order does not exceed ten lakh rupees;
B. the return has been furnished by the assessee for the tax year relevant to such order and the total income as per such return does not exceed fifty lakh rupees; and
C. the order in the case of the assessee is not based on,—
i. search initiated under section 247 of the Act or requisition made under section 248 of the Act in the case of the assessee or any other person; or
ii. survey carried out under section 253 of the Act; or
iii. information received under an agreement referred to in section 159 of the Act.
(ii) the “specified conditions” in relation to an Applicant under section 379 of the Act means:
(A) where he is not a person in respect of whom an order of detention has been made under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (52 of 1974) and when —
(i) such order of detention, on which the provisions of section 9 or section 12A of the said Act do not apply, has been revoked on the report of the Advisory Board under section 8 of the said Act or before the receipt of the report of the Advisory Board; or
(ii) such order of detention on which the provisions of section 9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under section 9(3), or on the report of the Advisory Board under section 8, read with section 9(2), of the said Act; or
(iii) such order of detention, on which the provisions of section 12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of the said section, or on the basis of the report of the Advisory Board under section 8, read with section 12A(6) of the said Act; or
(iv) such order of detention has not been set aside by a court of competent jurisdiction;
(B) where he is not a person in respect of whom prosecution for any offence punishable under the provisions of the Bharatiya Nyaya Sanhita, 2023, the Unlawful Activities (Prevention) Act, 1967 (37 of 1967), the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985), the Prohibition of Benami Transactions Act, 1988 (45 of 1988), the Prevention of Corruption Act, 1988 (49 of 1988) or the Prevention of Money-laundering Act, 2002 (15 of 2003) has been instituted and he has been convicted of any offence punishable under any of those Acts;
(C) where he is not a person in respect of whom prosecution has been initiated by an income-tax authority for any offence punishable under the provisions of this Act or the Bharatiya Nyaya Sanhita, 2023 or for the purpose of enforcement of any civil liability under any law for the time being in force, or such person has been convicted of any such offence consequent upon the prosecution initiated by an income-tax authority;
(D) where he is not a person who is notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (27 of 1992);
(E) where he is not a person in respect of whom proceedings under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015) have not been initiated for the tax year for which resolution of dispute is sought.
(iii) The “specified person” for the purposes of section 379 of the Act shall be a person who fulfils the specified conditions.
