RULE 90 INCOME-TAX RULES 2026
Procedure relating to transactions other than provision of information technology services.
90. (1) For the purposes of exercise of the option for safe harbour,—
| (a) | the assessee shall furnish Form No. 49, complete in all respects, to the Assessing Of-ficer on or before the due date specified in section 263(1)(c) for furnishing the return of income for the relevant tax year; and | |
| (b) | the return of income for the said tax year is furnished by the assessee on or before the date of furnishing of Form No. 49. |
(2) On receipt of Form No. 49, the Assessing Officer shall verify whether—
| (a) | the assessee exercising the option is an eligible assessee; and | |
| (b) | 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.
(3) Where the Assessing Officer doubts the valid exercise of the option for the safe harbour by an assessee, he shall make a refer-ence to the Transfer Pricing Officer for determination of the eligibil-ity of the assessee or the international transaction, or both, for the purposes of the safe harbour.
(4) For the purposes of sub-rule (3), the Transfer Pricing Officer 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.
(5) Where —
| (a) | the assessee does not furnish the information or documents or other evidence required by the Transfer Pricing Officer; or | |
| (b) | the Transfer Pricing Officer finds that the assessee is not an eligible assessee; or | |
| (c) | the Transfer Pricing Officer finds that the international transaction in respect of which the option referred to in sub-rule (1) has been exercised is not an eligible international transaction, |
the Transfer Pricing Officer shall, by order in writing, declare the option exercised by the assessee under sub-rule (1) to be invalid, after giving a reasonable 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.
(6) If the assessee objects to the order of the Transfer Pricing Officer under sub-rule (5) 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.
(7) On receipt of the objection referred to in sub-rule (6), the Commissioner shall after providing a reasonable 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.
(8) In a case, where option exercised by the assessee has been held to be valid, the Assessing Officer shall proceed to verify whether the transfer price declared by the assessee in respect of the relevant eligible international transactions is in accordance with the circumstances specified in rule 89(2) and, if it is not in accordance with the said circumstances, the Assessing Officer shall adopt the operating profit margin or rate of interest or commission specified in the said rule.
(9) For the purposes of this rule,—
| (i) | no reference under sub-rule (3) shall be made by an Assessing Officer after expiry of a period of two months from the end of the month in which Form No. 49 is received by him; | |
| (ii) | no order under sub-rule (5) shall be passed by the Transfer Pricing Officer after expiry of a period of two months from the end of the month in which the reference from the Assessing Officer under sub-rule (3) is received by him; and | |
| (iii) | the order under sub-rule (7) 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 (6) is received by him. |
(10) 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, within the time specified in sub-rule (9), then the option for safe harbour exercised by the assessee shall be treated as valid.
(11) Form No. 49 shall be furnished electronically either under digital signature or through electronic verification code and shall be verified by the person who is authorised to verify the return of income of the assessee under section 265.
(12) The Assessing Officer may make a reference under section 166 in respect of international transaction other than the eligible international transaction.