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 ..... price. As a 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 asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0TD (1) and (2A) shall apply for the assessment years 2020-21, 2021-22, 2022-23 and 2023-24 . [ Rule 10TD(3B) ] 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 Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11) or by the Commissioner under sub-rule (8) in respect of an objection filed by the assessee against the order of the TPO under sub-rule (11) , as the case may be; or (ii) the eligible 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 10TE(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 op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational transaction, Opportunity of being heard:- no order declaring the option exercised by the assessee to be invalid shall be passed without giving an opportunity of being heard to the assessee. [ Sub rule (6) ] Appeal against order of TPO:- If the assessee 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances include:- (a) functional profile of the assessee in respect of the international transaction; (b) the risks being undertaken by the assessee; (c) the substantive contractual conditions governing the role of the assessee in respect of the international transaction; (d) the conduct of the assessee as referred to in sub-rule (2) or sub-rule (3) of rule 10TB; 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im; (iii) the order under sub-rule (8) shall be passed by the Commissioner within a period of two months from the end of the month in which the objection filed by the assessee under sub-rule(7) is received by him. [ Sub rule (14) ] (15) If the Assessing Officer or the Transfer Pricing Officer or the Commissioner, as the case may be, does not make a reference or pass an order, as the case may be, within the time specified in sub-rule (14) , then the option for safe harbour exercised by the assessee shall be treated as valid. [ Sub rule (15) ] - Manuals - Ready reckoner - Law and practice - Reference Guide - Quick Commentary Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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