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”shall have the 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 accordance with the provisions of rule 10THC, [ and—
(i) is a Government company engaged in the business of generation, supply, transmission or distribution of electricity; or
(ii) is a co-operative society engaged in the business of procuring and marketing milk and milk products.]
10THB. Eligible specified domestic transaction.–The "Eligible specified domestic transaction" means a specified domestic transaction undertaken by an eligible assessee and which comprises of :—
(i) supply of electricity; or
(ii) transmission of electricity; or
(iii) wheeling of electricity; or
(iv) purchase of milk or milk products by a co-operative society from its members.
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:-
| S.No |
Eligible specified domestic Transaction |
Circumstances |
| 1. |
2. |
3. |
| 1. |
Supply of electricity,transmission of electricity,wheeling of electricity referred to in clause (i), (ii) or (iii) of rule 10THB, as the case may be |
The tariff in respect of supply of electricity, transmission of electricity,wheeling of electricity, as the case may be, is determined the methodology for determination of the tariff is approved by the Appropriate Commission in accordance with the provisions of the Electricity Act, 2003 (36 of 2003). |
| 2. |
Purchase of milk or milk products referred to in clause (iv) of rule 10THB. |
The price of milk or milk products is determined at a rate which is fixed on the basis of the quality of milk, namely, fat content and Solid Not Fat (SNF) content of milk; and-
(a) the said rate is irrespective of,-
(i) the quantity of milk procured;
(ii) the percentage of shares held by the members in the co-operative society;
(iii) the voting power held by the members in the society; and
(b) such prices are routinely declared by the cooperative society in a transparent manner and are available in public domain.”. |
(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).
(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 subsection (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, other than the transaction referred to in clause (iv) of rule 10 THB, undertaken during the previous year relevant to the assessment year beginning on the 1st day of April, 2013 or beginning on the 1st day of April, 2014 or beginning on the 1st day of April, 2015, Form 3CEFB may be furnished by the assessee on or before the 31st day of March, 2016.
“Provided also that in respect of eligible specified domestic transactions, referred to in clause (iv) of rule 10 THB, undertaken during the previous year relevant to the assessment year beginning on the 1st day of April, 2013 or beginning on the 1st day of April, 2014 or beginning on the 1st day of April, 2015, Form 3CEFB may be furnished by the assessee on or before the 31st day of December, 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,
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 order within the time specified in sub-rule (7), then the option for safe harbour exercised by the assessee shall be treated as valid.’
This Rule inserted by the Notifcation Dated 4th Feb 2015 |