Rule 196 of the Income-tax Rules, 2026

Where this rule sits

Rule 196 gives effect to Section 379 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.

← Rule 195  ·  Rule 197 →

What this rule does

Sub-rule (1) requires the Central Government to constitute a Dispute Resolution Committee for every region of Principal Chief Commissioner of Income-tax, for dispute resolution as provided under section 379.

Sub-rule (2) fixes the composition at three members: two retired officers from the Indian Revenue Service (Income-tax) who have held the post of Commissioner of Income-tax or any equivalent or higher post for five years or more, and one ex-officio member who is an officer not below the rank of Principal Commissioner of Income-tax or Commissioner of Income-tax as specified by the Board.

Sub-rule (3) fixes the members' appointment by the Central Government for a period of three years. Sub-rule (4) allows the Central Government to fix a sum to be paid as fee to the two retired officers on a per case basis, along with a sitting fee, as decided by the Board. Sub-rule (5) requires the Committee's decision to be by majority. Sub-rule (6) allows the Central Government, for reasons to be recorded in writing and after giving a reasonable opportunity of being heard, to remove any member from the Committee.

Why it is there

Section 379 provides for dispute resolution by a Committee but leaves its constitution to be prescribed. The rule fixes the geography — one Committee for every Principal Chief Commissioner region — and a composition designed to keep the Committee independent of the assessment while informed about it: two retired officers with long experience at Commissioner level and above, and one serving officer as an ex-officio member. Because two of the three are retired persons paid case by case, the rule also has to deal with their fee, their tenure and their removal.

Who it applies to

• The Central Government, which constitutes the Committee, appoints the members and may remove them
• A retired officer of the Indian Revenue Service (Income-tax) appointed as a member
• A serving officer not below the rank of Principal Commissioner of Income-tax or Commissioner of Income-tax appointed as the ex-officio member
• An assessee whose dispute is before a Dispute Resolution Committee under section 379

The figures, and what each one turns on

What this means in practice

The five-year requirement is about time spent at the level, not merely about having reached it: a retired officer must have held the post of Commissioner of Income-tax or an equivalent or higher post for five years or more. With a three-member body deciding by majority, the two retired members can carry a decision against the serving ex-officio member, which is what gives the Committee its independence. The rule fixes no fee figure — sub-rule (4) leaves the sum and the sitting fee to be fixed by the Central Government as decided by the Board — so no amount can be read out of it. Removal is possible at any time within the three-year term, but only for reasons recorded in writing and after a reasonable opportunity of being heard.

Where you meet this rule

A taxpayer meets the Committee itself when an application for dispute resolution under section 379 is taken up; this rule is what tells him the body is a three-member one deciding by majority, and who sits on it.

The words themselves

What people get wrong

• Reading the five-year requirement as five years of service anywhere. Sub-rule (2)(a) requires five years or more in the post of Commissioner of Income-tax or an equivalent or higher post.
• Expecting a unanimous decision. Sub-rule (5) provides for decision by majority.
• Treating the ex-officio member as the presiding authority. The rule gives him one of three seats and no casting or overriding voice.
• Reading a fee amount into sub-rule (4). It only empowers the Central Government to fix a sum on a per case basis along with a sitting fee, as decided by the Board.
• Assuming a member holds office for the full three years regardless. Sub-rule (6) allows removal for reasons recorded in writing after a reasonable opportunity of being heard.