Income Tax (Third Amendment) Rules, 2015 Dated 14–3‑2015 — Income Tax

Noti­fi­ca­tion No. 23/2015

New Del­hi, the 14th day of March, 2015

S.O. 758(E).- In exer­cise of the pow­ers con­ferred by sub-sec­tions (9) and (9A) of sec­tion 92CC read with sec­tion 295 of the Income-tax Act, 1961 (43 of 1961), the Cen­tral Board of Direct Tax­es here­by makes the fol­low­ing rules fur­ther to amend the Income-tax Rules, 1962, namely:-

1. (1). These rules may be called the Income-tax (Third Amend­ment) Rules, 2015.

    (2). They shall come into force on the date of their pub­li­ca­tion in the Offi­cial Gazette.

2. In the Income-tax Rules, 1962 (here­after referred to as the prin­ci­pal rules), -

(a) in rule 10 F,-

(i) after clause (b), the fol­low­ing clause shall be insert­ed, namely :-

“(ba) “appli­cant” means a per­son who has made an application;”;

(ii) after clause (h), the fol­low­ing clause shall be insert­ed, namely :-

“(ha) “roll­back year” means any pre­vi­ous year, falling with­in the peri­od not exceed­ing four pre­vi­ous years, pre­ced­ing the first of the pre­vi­ous years referred to in sub-sec­tion (4) of sec­tion 92CC;”;

(b) in rule10 H, in sub-rule (1),-

(i) for the word “Every” the word “Any” shall be substituted;

(ii) for the word “shall” the word “may” shall be substituted;

© in rule 10 I, for the words, fig­ures and let­ter “who has entered into a pre­fil­ing con­sul­ta­tion as referred to in rule 10H”, the words, fig­ures and let­ter “referred to in rule 10 G” shall be substituted;

(d) in rule 10 K, in sub-rule (2) after the words “with under­stand­ing reached in”, the word “any” shall be inserted;

(e) in rule 10 M, in sub-rule (1), after clause (v), the fol­low­ing clause shall be

insert­ed, namely:-

“(va) roll­back pro­vi­sion referred to in rule 10 MA;”;

(f) after rule 10 M, the fol­low­ing rule shall be insert­ed, namely:-

“Roll Back of the Agreement.

10 MA. (1) Sub­ject to the pro­vi­sions of this rule, the agree­ment may pro­vide for deter­min­ing the arm’s length price or spec­i­fy the man­ner in which arm’s length price shall be deter­mined in rela­tion to the inter­na­tion­al trans­ac­tion entered into by the per­son dur­ing the roll­back year (here­inafter referred to as “roll­back provision”).

(2) The agree­ment shall con­tain roll­back pro­vi­sion in respect of an inter­na­tion­al trans­ac­tion sub­ject to the fol­low­ing, namely:-

(i)the inter­na­tion­al trans­ac­tion is same as the inter­na­tion­al trans­ac­tion to which the agree­ment (oth­er than the roll­back pro­vi­sion) applies;

(ii) the return of income for the rel­e­vant roll­back year has been or is fur­nished by the appli­cant before the due date spec­i­fied in Expla­na­tion 2 to sub-sec­tion (1) of sec­tion 139;

(iii) the report in respect of the inter­na­tion­al trans­ac­tion had been fur­nished in accor­dance with sec­tion 92E;

(iv) the applic­a­bil­i­ty of roll­back pro­vi­sion, in respect of an inter­na­tion­al trans­ac­tion, has been request­ed by the appli­cant for all the roll­back years in which the said inter­na­tion­al trans­ac­tion has been under­tak­en by the appli­cant; and

(v) the appli­cant has made an appli­ca­tion seek­ing roll­back in Form 3CEDA in accor­dance with sub-rule (5);

(3) Notwith­stand­ing any­thing con­tained in sub-rule (2), roll­back pro­vi­sion shall not be pro­vid­ed in respect of an inter­na­tion­al trans­ac­tion for a roll­back year, if,-

(i) the deter­mi­na­tion of arm’s length price of the said inter­na­tion­al trans­ac­tion for the said year has been sub­ject mat­ter of an appeal before the Appel­late Tri­bunal and the Appel­late Tri­bunal has passed an order dis­pos­ing of such appeal at any time before sign­ing of the agree­ment; or

(ii) the appli­ca­tion of roll­back pro­vi­sion has the effect of reduc­ing the total income or increas­ing the loss, as the case may be, of the appli­cant as declared in the return of income of the said year.

(4) Where the roll­back pro­vi­sion spec­i­fies the man­ner in which arm’s length price shall be deter­mined in rela­tion to an inter­na­tion­al trans­ac­tion under­tak­en in any roll­back year then such man­ner shall be the same as the man­ner which has been agreed to be pro­vid­ed for deter­mi­na­tion of arm’s length price of the same inter­na­tion­al trans­ac­tion to be under­tak­en in any pre­vi­ous year to which the agree­ment applies, not being a roll­back year.

(5) The appli­cant may, if he desires to enter into an agree­ment with roll­back pro­vi­sion, fur­nish along with the appli­ca­tion, the request for the same in Form No. 3 CEDA with proof of pay­ment of an addi­tion­al fee of five lakh rupees:

Pro­vid­ed that in a case where an appli­ca­tion has been filed pri­or to the 1^st day of Jan­u­ary, 2015, Form No. 3CEDA along with proof of pay­ment of addi­tion­al fee may be filed at any time on or before the 31st day of March, 2015 or the date of enter­ing into the agree­ment whichev­er is ear­li­er: Pro­vid­ed fur­ther that in a case where an agree­ment has been entered into before the 1st day of Jan­u­ary, 2015, Form No. 3CEDA along with proof of pay­ment of addi­tion­al fee may be filed at any time on or before the 31st day of March, 2015 and, notwith­stand­ing any­thing con­tained in rule 10 Q, the agree­ment may be revised to pro­vide for roll­back pro­vi­sion in the said

agree­ment in accor­dance with this rule.”;

(g) in rule 10 R, in sub-rule (1), in clause (iv), after the words, brack­ets, fig­ures and let­ter “under sub-rule (4) of rule 10Q”, the words, brack­ets, fig­ures and let­ters “or sub-rule (7) of rule 10 RA” shall be inserted;

(h) after rule 10 R, the fol­low­ing rule shall be insert­ed, namely:-

“Pro­ce­dure for giv­ing effect to roll­back pro­vi­sion of an Agree­ment.

10 RA.(1) The effect to the roll­back pro­vi­sions of an agree­ment shall be giv­en in accor­dance with this rule.

(2) The appli­cant shall fur­nish mod­i­fied return of income referred to in sec­tion 92CD in respect of a roll­back year to which the agree­ment applies along with the proof of pay­ment of any addi­tion­al tax aris­ing as a con­se­quence of and com­put­ed in accor­dance with the roll­back provision.

(3) The mod­i­fied return referred to in sub-rule(2) shall be fur­nished along with the mod­i­fied return to be fur­nished in respect of first of the pre­vi­ous years for which the agree­ment has been request­ed for in the application.

(4) If any appeal filed by the appli­cant is pend­ing before the Com­mis­sion­er (Appeals), Appel­late Tri­bunal or the High Court for a roll­back year, on the issue which is the sub­ject mat­ter of the roll­back pro­vi­sion for that year, the said appeal to the extent of the sub­ject cov­ered under the agree­ment shall be with­drawn by the appli­cant before fur­nish­ing the mod­i­fied return for the said year.

(5) If any appeal filed by the Assess­ing Offi­cer or the Prin­ci­pal Com­mis­sion­er or Com­mis­sion­er is pend­ing before the Appel­late Tri­bunal or the High Court for a roll­back year, on the issue which is sub­ject mat­ter of the roll­back pro­vi­sion for that year, the said appeal to the extent of the sub­ject cov­ered under the agree­ment shall be with­drawn by the Assess­ing Offi­cer or the Prin­ci­pal Com­mis­sion­er or the Com­mis­sion­er, as the case may be, with­in three months of fil­ing of mod­i­fied return by the applicant.

(6) The appli­cant, the Assess­ing Offi­cer or the Prin­ci­pal Com­mis­sion­er or the Com­mis­sion­er, shall inform the Dis­pute Res­o­lu­tion Pan­el or the Com­mis­sion­er (Appeals) or the Appel­late Tri­bunal or the High Court, as the case may be, the fact of an agree­ment con­tain­ing roll­back pro­vi­sion hav­ing been entered into along with a copy of the same as soon as it is prac­ti­ca­ble to do so.

(7) In case effect can­not be giv­en to the roll­back pro­vi­sion of an agree­ment in accor­dance with this rule, for any roll­back year to which it applies, on account of fail­ure on the part of appli­cant, the agree­ment shall be cancelled.”;

(i) in Appen­dix-II of the prin­ci­pal rules,-

(A) in Form No. 3CEC, in item 10, after the words, “Num­ber of years for which APA is pro­posed to be applied”, the words “includ­ing the roll­back years” shall be inserted;

(B) in Form No. 3CED, in item 5, after sub-item (e), the fol­low­ing shall be insert­ed, namely:-

“f. whether any roll­back request is being made                     Yes/No

 g. If yes, enclose copy of rel­e­vant Form No. 3CEDA.”;

© after Form No. 3CED, fol­low­ing Form shall be insert­ed, namely: -

“Form No. 3 CEDA

(See sub-rule (5) of rule 10 MA)

Appli­ca­tion for roll­back of an Advance Pric­ing Agreement

To,

The Com­pe­tent Author­i­ty of India

or

Direc­tor Gen­er­al of Income Tax (Inter­na­tion­al Taxation)

New Del­hi

Sir/Madam,

This is to state that.….….….….….….….. (Name of the Applicant).…..wishes to nego­ti­ate an APA with the Cen­tral Board of Direct Tax­es con­tain­ing roll­back pro­vi­sion. I am sub­mit­ting here­with the nec­es­sary par­tic­u­lars hereunder:

1. Par­tic­u­lars of the applicant:

(a) Full name of the applicant:

(b) Per­ma­nent Account Number:

© Address of the applicant:

(d) Address for communication:

(e) Location(s) of the busi­ness enter­pris­es in India:

(f) Email id and the con­tact num­bers of the per­son with whom cor­re­spon­dence is required to be made:

(g) Names and des­ig­na­tion of the autho­rised rep­re­sen­ta­tives who would be appear­ing before the author­i­ties for nego­ti­a­tions of the APA:

2. Whether pre-fil­ing dis­cus­sions in respect of roll­back were sought by the appli­cant? If yes, please furnish:

(a) Date of appli­ca­tion for pre-fil­ing meeting:

(b) Date of pre-fil­ing meeting(s) with the APA Team:

3. Whether appli­ca­tion in Form 3CED is being filed simultaneously:

4. Details of inter­na­tion­al transaction(s) includ­ing Name(s) of the Asso­ci­at­ed Enter­pris­es in respect of which roll­back is request­ed for:

5. Whether the inter­na­tion­al transaction(s) is the same as that in respect of which APA request is being made in Form 3CED by the applicant:

6. Par­tic­u­lars of addi­tion­al Fee paid by the appli­cant:            Amount in Rs.

Chal­lan No:

Dat­ed:

7. The details of pre­vi­ous years for which roll­back is being sought:

8. Has the same inter­na­tion­al trans­ac­tion been under­tak­en in any oth­er year for which roll­back is per­mis­si­ble but the same is not being request­ed for. If yes, the rea­sons for the same be provided:

9. Peri­od of APA pro­posed along with the date from which APA is sought to be made applic­a­ble in the appli­ca­tion in Form 3CED:

10. Whether return of income for all the pre­vi­ous years men­tioned in 7 above have been fur­nished on or before the due date:             Yes/No

11. If yes, pro­vide details includ­ing acknowl­edge­ment No., date of fur­nish­ing etc.

12. Whether audit report under sec­tion 92 E in respect of the inter­na­tion­al trans­ac­tion referred to in 4 above for all the pre­vi­ous years men­tioned in 7 above have been fur­nished on or before the due date:                       Yes/No

1. If yes, pro­vide details includ­ing date of fur­nish­ing etc.

2. Details of pend­ing pro­ceed­ings includ­ing appeals for the years men­tioned in 7 above in respect of inter­na­tion­al transaction(s) men­tioned in 4 above :

3. Whether Appel­late Tri­bunal has dis­posed of any appeal in respect of inter­na­tion­al trans­ac­tion men­tioned in 4 above for any of the years men­tioned in 7 above? if yes, then details may be provided:

I declare that the infor­ma­tion fur­nished in the appli­ca­tion is cor­rect and tru­ly stated.

Yours faith­ful­ly,

Place:

Date:

Appli­cant

Notes:

1. The Form shall be filed along with an appli­ca­tion in Form 3CED for enter­ing into an APA.

2. If the space pro­vid­ed for answer­ing any item in the appli­ca­tion is found insuf­fi­cient, sep­a­rate enclo­sures may be used for the pur­pose. These enclo­sures should be signed by the per­son autho­rised to sign the appli­ca­tion in Form 3CED.

3. The Form shall be accom­pa­nied with proof of hav­ing paid fee of five lakh rupees. This fee is in addi­tion to any fee payable along with Form 3CED.

1. The appli­ca­tion shall be accom­pa­nied by all the rel­e­vant documents.”.

[F.No.142 /14/2014-TPL]

(Amit Katoch)

Under Sec­re­tary (Tax Pol­i­cy and Legislation‑I)

Note. - The prin­ci­pal rules were pub­lished vide noti­fi­ca­tion No. S.O.969 (E), dat­ed the 26th March, 1962 and last amend­ed by Income-tax (Sec­ond Amend­ment) Rules, 2015 vide noti­fi­ca­tion num­ber S.O. 350 (E), dat­ed 04-02-2015.