9911796707
TMI BlogPower of Board to make Safe Harbour Rules - Section 92CB read with Rule 10TD of income Tax RulesX X X X Extracts X X X X X X X X Extracts X X X X ..... result, a large number of such transactions are being subjected to adjustment giving rise to considerable dispute. * To overcome this section 92CB was inserted to empower Board to formulate safe harbour rules. * (1) The determination of - * (a) Income referred in Section 9(1)(i) or * (b) arm's length price u/s 92C or 92CA shall be subject to safe harbour rules. As per Rule 10TD of Income Tax Rule * The Board has been empowered by inserting section 92B by the Finance act (No. 2) Act, 2009 (w.e.f. 01.04.2009) to formulate safe harbour rules (i.e. to provide the circumstances in which the income tax authorities shall accept the transfer price. * Where an eligible assessee has entered into an eligible international transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] * No comparability adjustment and allowance under the second proviso to sub-section of section 92C shall be made to the transfer price declared by the eligible assessee and accepted under rules 10TD (1) and (2) or, as the case may be, rule 10TD(2A) above. [ Rule 10TD(4) ] * The provisions of sections 92D and 92E in respect of an international transaction shall apply irrespective of the fact that the assessee exercises his option for safe harbour in respect of such transaction. [ Rule 10TD(5) ] Procedure of filing of Form 3CEFA for exercising the safe harbour rule [ Rule 10TE of Income Tax Rules ] * For the purposes of exercise of the option for safe harbour, the assessee shall furnish a Form 3CEFA, complete in all respects, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee opts out of the safe harbour, for the relevant assessment year, by furnishing a declaration to that effect, to the Assessing Officer. * Provided also that nothing contained in this sub-rule shall apply to the option for safe harbour validly exercised under sub-rule (3B) of rule 10TD. [ Sub Rule (2) ] * On receipt of Form 3CEFA,the Assessing Officer shall verify whether- * (i) the assessee exercising the option is an eligible assessee; and * (ii) the transaction in respect of which the option is exercised is an eligible international transaction, before the option for safe harbour by the assessee is treated to be validly exercised. [ Sub rule (3) ] * Where the Assessing officer doubts the valid exercise of the option for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee objects to the order of the Transfer Pricing Officer under sub-rule (6) or sub-rule (11) declaring the option to be invalid, * he may file his objections with the Commissioner, to whom the Transfer Pricing Officer is subordinate, within fifteen days of receipt of the order of the Transfer Pricing Officer. [ Sub rule (7) ] * On receipt of the objection referred to in sub-rule (7) , the Commissioner shall after providing an opportunity of being heard to the assessee pass appropriate orders in respect of the validity or otherwise of the option exercised by the assessee and cause a copy of the said order to be served on the assessee and the Assessing Officer. [ Sub rule (8) ] * Ensure Declared Transfer price according to rules or not:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 10TB (2) or (3); or * (e) the substantive nature of the international transaction. [ Sub rule (10) ] * The Transfer Pricing Officer on receipt of a reference under sub-rule (10) shall, by an order in writing, determine the validity or otherwise of the option exercised by the assessee for the relevant year after providing an opportunity of being heard to the assessee and cause a copy of the said order to be served on the assessee and the Assessing Officer. [ Sub rule (11) ] * Nothing contained in this rule shall affect the power of the Assessing Officer to make a reference under section 92CA in respect of international transaction other than the eligible international transaction. [ Sub rule (12) ] * Where no option for safe har ..... X X X X Extracts X X X X X X X X Extracts X X X X
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