[TO BE PUBLSIHED IN THE GAZETTE OF INDIA EXTRAORDINARY, PART
II,SECTION 3, SUB-SECTION (ii)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
[CENTRAL BOARD OF DIRECT TAXES]
Notification
New Delhi, the 4thFebruary, 2015
INCOME TAX
S.O.350 (E)In exercise of the powers conferred by sections 92CB and
92D 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 (2 nd Amendment),
Rules, 2015.
(2) They shall come into force from the date of their publication in
the Official Gazette.
2. In the Income-tax Rules, 1962, --
(A) in Part-II, in sub-part D relating to special cases,--
(1) in rule 10 D,--
(a) after sub-rule (2), the following sub-rule shall be inserted,
namely:-
"(2A) Nothing contained in sub-rule (1), in so far as it relates to
an eligible specified domestic transaction referred to in rule 10
THB , shall apply in a case of an eligible assessee referred to in
rule 10 THA and, the said eligible assessee, shall keep and
maintain the following information and documents, namely:-
(i) a description of the ownership structure of the
assessee enterprise with details of shares or other
ownership interest held therein by other enterprises;
(ii) a broad description of the business of the assessee
and the industry in which the assessee operates, and of
the business of the associated enterprises with whom the
assessee has transacted;
(iii) the nature and terms (including prices) of specified
domestic transactions entered into with each associated
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enterprise and the quantum and the value of each such
transaction or class of such transaction;
(iv) a record of proceedings if any before the regulatory
commission and orders of such commission relating to
the specified domestic transaction;
(v) a record of the actual working carried out for
determining the transfer price of the specified domestic
transaction;
(vi) the assumptions, policies and price negotiations, if
any, which have critically affected the determination of
the transfer price;
(vii) any other information, data or document, including
information or data relating to the associated enterprise,
which may be relevant for determination of the transfer
price.";
(b)in sub-rule (3), for the word, brackets and figure "sub-rule
(1) ", the word, brackets, figures and letter "sub-rules (1) and
(2A)" shall be substituted;
(c) in sub-rule (4) and in the proviso to sub-rule (4), for the words,
brackets and figures "sub-rules (1) and (2)",wherever they occur,
the words , brackets, figures and letter "sub-rules (1), (2) and
(2A)" shall be substituted;
(d)in sub-rule (5), for the words, brackets and figures "sub-rules
(1) and (2)", the words, brackets, figures and letter "sub-rules
(1), (2) and (2A)" shall be substituted;
(2) afterrule 10 T, in the heading, for the words "Safe Harbour Rules",
the words " Safe Harbour Rules for International Transactions" shall be
substituted;
(3) after rule 10TG, the following rules shall be inserted, namely:-
`"Safe Harbour Rules for Specified Domestic Transactions"
10TH. Definitions.- For the purposes of this rule and rules 10THA to 10THD,-
(a) "Appropriate Commission" shall have the same meaning as assigned to it
in sub-section (4) of section 2 of the Electricity Act, 2003 (36 of 2003);
(b) "Governmentcompany"shallhavethe same meaning as assigned toitinsub-
section (45) of section 2 ofthe CompaniesAct,2013 (18 of 2013);
10THA. Eligible assessee. The `eligible assessee' means a person who
has exercised a valid option for application of safe harbour rules in
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accordance withthe provisions of rule 10 THC, and is a Government
company engaged in the business of generation, transmission or distribution
of electricity.
10THB. Eligible specified domestic transaction.The "Eligible specified
domestic transaction" means a specified domestic transaction undertaken by
an eligible asseessee and which comprises of :-
(i) supply of electricity by a generating company; or
(ii) transmission of electricity; or
(iii) wheeling of electricity.
Safe Harbour
10THC.(1)Where an eligible assessee has entered into an eligible specified
domestic transaction in any previous year relevant to an assessment year and
the option exercised by the said assessee is treated to be validly exercised
under rule 10THD, the transfer price declared by the assessee in respect of
such transaction for that assessment year shall be accepted by the income-
tax authorities, if it is in accordance with the circumstances as specified in
sub-rule (2).
(2) The circumstances referred to in sub-rule (1) in respect of the eligible
specified domestic transaction specified in column (2) of the Table below
shall be as specified in the corresponding entry in column (3) of the said
Table:-
SNo Eligible specified Circumstances
domestic Transaction
1. 2. 3.
1 Supply of electricity, The tariff in respect of supply of
transmission of electricity, electricity, transmission of electricity,
wheeling of electricity wheeling of electricity, as the case
referred to in item (i), (ii) or may be, is determined by the
(iii) of rule THB,as the case Appropriate Commission in
may be. accordance with the provisions of
the Electricity Act, 2003 (36 of
2003).
(3) No comparability adjustment and allowance under the second proviso
to sub-section (2) of section 92C shall be made to the transfer price declared
by the eligible assessee and accepted under sub-rule (1).
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(4) The provisions of sections 92D and 92E in respect of a specified
domestic transaction shall apply irrespective of the fact that the assessee
exercises his option for safe harbour in respect of such transaction.
Procedure.
10 THD.(1) For the purposes of exercise of the option for safe harbour, the
assessee shall furnish a Form 3CEFB, complete in all respects, to the
Assessing Officer on or before the due date specified in Explanation 2 to sub-
section (1) of section 139 for furnishing the return of income for the relevant
assessment year :
Provided that the return of income for the relevant assessment year is
furnished by the assessee on or before the date of furnishing of Form 3CEFB:
Provided further that in respect of eligible specified domestic transactions
undertaken during the previous year relevant to the assessment year
beginning on the 1st day of April, 2013 orbeginning on the 1st day of April,
2014, Form 3CEFB can be furnished by the assessee on or before the 31st
day of March, 2015.
(2) On receipt of Form 3CEFB, the Assessing Officer shall verify whether-
(i) theassessee exercising the option is an eligible assessee; and
(ii) the transaction in respect of which the option is exercised is an
eligible specified domestic transaction,
before the option for safe harbour by the assessee is treated to be validly
exercised.
(3) Where the Assessing officer doubts the valid exercise of the option for
the safe harbour by an assessee, he may require the assessee, by notice in
writing, to furnish such information or documents or other evidence as he may
consider necessary, and the assessee shall furnish the same within the time
specified in such notice.
(4) Where-
(a) theassessee does not furnish the information or documents or
other evidence required by the Assessing Officer; or
(b) the Assessing Officer finds that the assessee is not an eligible
assessee; or
(c) the Assessing Officer finds that the specified domestic
transaction in respect of which the option referred to in sub-rule
(1) has been exercised is not an eligible specified domestic
transaction; or
(d) the tariff is not in accordance with the circumstances specified in
sub-rule (2) of rule 10 THC,
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the Assessing Officer shall, by order in writing, declare the option exercised
by the assessee under sub-rule (1) to be invalid and cause a copy of the said
order to be served on the assessee:
Provided that 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.
(5) If the assessee objects to the order of the Assessing Officer under sub-
rule (4) declaring the option to be invalid, he may file his objections with the
Principal Commissioner or the Commissioner or the Principal Director or the
Director, as the case may be, to whom the Assessing Officer is subordinate,
within fifteen days of receipt of the order of the Assessing Officer.
(6) On receipt of the objection referred to in sub-rule (5), the Principal
Commissioner or the Commissioner or the Principal Director or the Director,
as the case may be, 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.
(7) For the purposes of this rule,-
(i) no order under sub-rule(4) shall be made by an Assessing
Officer after expiry of a period of three months from the end of
the month in which Form 3CEFB is received by him;
(ii) the order under sub-rule (6) shall be passed by the Principal
Commissioner or Commissioner or Principal Director or Director,
as the case may be, within a period of two months from the end
of the month in which the objection filed by the assessee under
sub-rule(5) is received by him.
(8) If the Assessing Officer or the Principal Commissioner or the
Commissioner or the Principal Director or the Director, as the case may be,
does not pass an orderwithin the time specified in sub-rule (7), then the option
for safe harbour exercised by the assessee shall be treated as valid.';
(B) in Appendix II, after Form No. 3CEFA, the following Form shall be
inserted, namely:-
"Form No. 3CEFB
(See sub-rule (1) of rule 10THD)
Application for Opting for Safe Harbour in respect of
Specified Domestic Transactions
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To,
The Assessing Officer
...................................
Sir/Madam,
I propose to opt for the safe harbour rules under section 92CB of the Income-
tax Act, 1961 read with rules 10TH to 10THD of the Income-tax Rules, 1962.
In this regard the particulars are as under:
1.General:
(a) Full name of the assessee:
(b) Permanent Account Number:
(c) Address of the assessee:
(d) Nature of business or activities of the assessee:
(e) Status
(f) Assessment Year
2. Eligible Specified Domestic Transaction:
Sl. Particulars in respect of eligible specified Remarks
No domestic transaction
1. Has the eligible assessee entered into Yes/No
any specified domestic transaction in
respect of supply of electricity,
transmission of electricity or wheeling of
electricity referred in item (i), (ii) or (iii) of
Rule 10THB?
If Yes, provide the following details:
(a) Name and address of the
associated enterprises(AE) with
whom the eligible specified
domestic transaction has been
entered into.
(b) Description of the eligible specified
domestic transaction.
(c) Details of relevant order of the
Appropriate Commission
determining the tariff.
(d) Amount received or
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receivable/paid or payable in
respect of the eligible specified
domestic transaction.
(e) Whether transfer price is in Yes/No
accordance with the circumstances
specified under rule 10THC.
I declare that the information furnished herein is correct and truly stated.
Yours faithfully,
Place:
Date:
Signature
Name
Designation/Capacity
Address
Note1.-Associated enterprise shall have the same meaning as provided in
clause (a) of rule 10A.
Note 2.-The application shall be verifiedby the person authorised to verify the
return of income under section 140.".
Notification No. 11 /2015 [F.No. 142/7/2014-TPL]
Ashish Kumar
Director (Tax Policy and Legislation)
Note: - The principal rules were published in the Gazette of India
Extraordinary, part III, section 3, sub-section (i),vide notification number S.O.
969(E), dated the, 26th March, 1962 and were last amended vide notification
number S.O-180(E), dated the 19/01/2015.
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