You have a transfer pricing adjustment that also bites your associated enterprise abroad. Can you run MAP and the domestic appeal together, and what closes the MAP down?
You can run both. India follows a liberal regime and permits appeal and MAP proceedings to be pursued simultaneously, which many treaty partners do not. But a final ITAT order on the merits for the same year ends it: the competent authorities will not deviate from that order, the MAP is closed as resolved by a domestic remedy, and India then asks the treaty partner for correlative relief. Access is refused altogether in a defined set of cases, and there are fixed clocks for accepting a MAP outcome and for the officer to give effect to it.
Decided by the CBDT Circulars & Instructions (Issued over the signature of Smarak Swain, Director (APA), Central Board of Direct Taxes) on 2022-06-10, reported as F. No. 500/09/2016-APA-I dated 10 June 2022, MAP GUIDANCE/2022, 22 pages, in five Parts A to E. It updates the MAP Guidance dated 7 August 2020.. It bears on section Rule 44G, section 90, section 90A, section 201, section 92(3) of the Income Tax Act 1961, in Appeals, Assessment & Scrutiny, How Tax Law Is Read and Demand, Recovery & Stay matters.
This is the administrative code that governs every MAP in India and it decides the sequencing question a practitioner actually faces: whether to press the Tribunal appeal to hearing or to hold it while MAP runs. It also sets out what will get MAP access refused before you spend anything on it.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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The Mutual Agreement Procedure is described in Part A as an alternate tax dispute resolution mechanism available to taxpayers under the DTAAs for resolving disputes giving rise to double taxation or taxation not in accordance with DTAAs. Its legal basis is the MAP Article of the relevant treaty, predominantly based on Article 25 of the UN and OECD Model Conventions and given effect through s.90 or s.90A, together with Rule 44G of the Income-tax Rules 1962 as notified by G.S.R. 282(E) dated 6 May 2020, which replaced the earlier rules 44G and 44H. Rule 44G(1) allows a resident aggrieved by the action of the tax authorities of another country to apply to the Competent Authority in India in Form No. 34F. India has two competent authorities, the Joint Secretary FT&TR-I for Europe and North America including the Caribbean and the Joint Secretary FT&TR-II for the rest of the world, both stated to function independently of the tax authorities who audit taxpayers. India is committed to endeavour to resolve MAP cases within an average timeframe of 24 months. The Guidance is in five parts: A Introduction and Basic Information, B Access and Denial of Access to MAP, C Technical Issues, D Implementation of MAP Outcomes and E Applicant's Responsibilities.
The Guidance is administrative and not legislative: it states that if any element of it conflicts with domestic legislation, rules, instructions and circulars in India or with India's DTAAs, those provisions prevail. Part B gives wide access, covering transfer pricing adjustments, the existence of a permanent establishment, attribution of profits to a permanent establishment, characterisation or re-characterisation of income and expenses including royalties, fees for technical services and interest, cases involving domestic anti-abuse provisions and s.201 withholding disputes after the assessment order stage. Access is given but the outcome is limited where the taxpayer has a unilateral APA (the terms of the UAPA are not changed and correlative relief is sought from the treaty partner instead), where safe harbour applies (the arm's length price of the covered transactions is not changed), where an ITAT order on merits exists, and where an Indian taxpayer has settled a transfer pricing case under Vivad se Vishwas (no deviation from the VsV result; correlative relief is sought instead). Access is denied where the application is out of time under the MAP Article, where the objection is found not to be justified, where the application is not complete in all respects and the defects are not cured, where a settlement order of the ITSC or an advance ruling of the AAR covering the same issues has been obtained or an application is under examination, where a non-resident taxpayer opted for VsV on the same issue, and in respect of issues purely governed by India's domestic law.
Part C states that India follows a liberal regime where the taxpayer can choose to pursue both appeal and MAP proceedings simultaneously, while noting that many of India's treaty partners do not allow this. The corollary is that the domestic proceeding, once final, governs: the competent authorities in India shall not deviate from the orders of the ITAT for the relevant year where the dispute is decided on merits, such MAP cases are closed as having been resolved by a domestic remedy, and the taxpayer must immediately notify the competent authorities of any ITAT order so that MAP proceedings are closed forthwith. If the ITAT sets the matter aside for fresh adjudication rather than deciding on merits, finality has not been reached and MAP access can be given again after fresh adjudication. On recurring issues the competent authorities may resolve them on the same principles as adopted in a prior MAP resolution but cannot resolve them in advance of an order or action by the tax authorities in India. On downward adjustments the position is asymmetric: the competent authorities of India cannot go below the returned income, which is expressly prohibited in Indian domestic law, but in cases involving adjustments made by a treaty partner the Indian competent authority may go below the returned income of the Indian taxpayer to implement the MAP in full measure. Interest and penalty are consequential issues outside the competent authorities' mandate and are administered under domestic law, save that where the amount is linked to the quantum of income it varies in the same proportion as the variation in income; fees and penalties not connected to the quantum of income are unaffected. Collection of taxes can be kept in suspension during MAP only with the limited number of treaty partners with which India has a Memorandum of Understanding under the MAP Article; otherwise domestic law and CBDT instructions govern stay of demand. Secondary adjustments must form part of the MAP resolution where the primary transfer pricing adjustment was made in financial year 2016-17 or thereafter. Part D fixes the implementation clocks and carries the exception that a MAP outcome cannot be implemented where an ITAT order for the same year comes to the competent authorities' knowledge after the MAP has been resolved or is pronounced after resolution but before implementation, in which case correlative relief is sought from the treaty partner for the adjustments sustained by the ITAT. Part E imposes a duty of true disclosure in Form 34F and a continuing duty to keep the competent authorities up to date on all material changes, good faith action being described as the hallmark of alternate dispute resolution under MAP.
India follows a liberal regime where the taxpayer can choose to pursue both appeal and MAP proceedings simultaneously.
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Handle my notice → Ask a CA on WhatsAppYou can run both. India follows a liberal regime and permits appeal and MAP proceedings to be pursued simultaneously, which many treaty partners do not. But a final ITAT order on the merits for the same year ends it: the competent authorities will not deviate from that order, the MAP is closed as resolved by a domestic remedy, and India then asks the treaty partner for correlative relief. Access is refused altogether in a defined set of cases, and there are fixed clocks for accepting a MAP outcome and for the officer to give effect to it. This was decided by the CBDT Circulars & Instructions (Issued over the signature of Smarak Swain, Director (APA), Central Board of Direct Taxes) and bears on section Rule 44G, section 90, section 90A, section 201, section 92(3) of the Income Tax Act 1961. It is reported as F. No. 500/09/2016-APA-I dated 10 June 2022, MAP GUIDANCE/2022, 22 pages, in five Parts A to E. It updates the MAP Guidance dated 7 August 2020.. This is the administrative code that governs every MAP in India and it decides the sequencing question a practitioner actually faces: whether to press the Tribunal appeal to hearing or to hold it while MAP runs. It also sets out what will get MAP access refused before you spend anything on it. If it applies to you, the first step is this: Diarise the treaty time limit for the MAP application, ordinarily three years from the first notification of the action that results in taxation not in accordance with the treaty; an application after that is refused access.
The Mutual Agreement Procedure is described in Part A as an alternate tax dispute resolution mechanism available to taxpayers under the DTAAs for resolving disputes giving rise to double taxation or taxation not in accordance with DTAAs. Its legal basis is the MAP Article of the relevant treaty, predominantly based on Article 25 of the UN and OECD Model Conventions and given effect through s.90 or s.90A, together with Rule 44G of the Income-tax Rules 1962 as notified by G.S.R. 282(E) dated 6 May 2020, which replaced the earlier rules 44G and 44H. Rule 44G(1) allows a resident aggrieved by the action of the tax authorities of another country to apply to the Competent Authority in India in Form No. 34F. India has two competent authorities, the Joint Secretary FT&TR-I for Europe and North America including the Caribbean and the Joint Secretary FT&TR-II for the rest of the world, both stated to function independently of the tax authorities who audit taxpayers. India is committed to endeavour to resolve MAP cases within an average timeframe of 24 months. The Guidance is in five parts: A Introduction and Basic Information, B Access and Denial of Access to MAP, C Technical Issues, D Implementation of MAP Outcomes and E Applicant's Responsibilities. The matter was decided on 2022-06-10 by the CBDT Circulars & Instructions (Issued over the signature of Smarak Swain, Director (APA), Central Board of Direct Taxes). On those facts the CBDT Circulars & Instructions held as follows. The Guidance is administrative and not legislative: it states that if any element of it conflicts with domestic legislation, rules, instructions and circulars in India or with India's DTAAs, those provisions prevail. Part B gives wide access, covering transfer pricing adjustments, the existence of a permanent establishment, attribution of profits to a permanent establishment, characterisation or re-characterisation of income and expenses including royalties, fees for technical services and interest, cases involving domestic anti-abuse provisions and s.201 withholding disputes after the assessment order stage. Access is given but the outcome is limited where the taxpayer has a unilateral APA (the terms of the UAPA are not changed and correlative relief is sought from the treaty partner instead), where safe harbour applies (the arm's length price of the covered transactions is not changed), where an ITAT order on merits exists, and where an Indian taxpayer has settled a transfer pricing case under Vivad se Vishwas (no deviation from the VsV result; correlative relief is sought instead). Access is denied where the application is out of time under the MAP Article, where the objection is found not to be justified, where the application is not complete in all respects and the defects are not cured, where a settlement order of the ITSC or an advance ruling of the AAR covering the same issues has been obtained or an application is under examination, where a non-resident taxpayer opted for VsV on the same issue, and in respect of issues purely governed by India's domestic law.
Part C states that India follows a liberal regime where the taxpayer can choose to pursue both appeal and MAP proceedings simultaneously, while noting that many of India's treaty partners do not allow this. The corollary is that the domestic proceeding, once final, governs: the competent authorities in India shall not deviate from the orders of the ITAT for the relevant year where the dispute is decided on merits, such MAP cases are closed as having been resolved by a domestic remedy, and the taxpayer must immediately notify the competent authorities of any ITAT order so that MAP proceedings are closed forthwith. If the ITAT sets the matter aside for fresh adjudication rather than deciding on merits, finality has not been reached and MAP access can be given again after fresh adjudication. On recurring issues the competent authorities may resolve them on the same principles as adopted in a prior MAP resolution but cannot resolve them in advance of an order or action by the tax authorities in India. On downward adjustments the position is asymmetric: the competent authorities of India cannot go below the returned income, which is expressly prohibited in Indian domestic law, but in cases involving adjustments made by a treaty partner the Indian competent authority may go below the returned income of the Indian taxpayer to implement the MAP in full measure. Interest and penalty are consequential issues outside the competent authorities' mandate and are administered under domestic law, save that where the amount is linked to the quantum of income it varies in the same proportion as the variation in income; fees and penalties not connected to the quantum of income are unaffected. Collection of taxes can be kept in suspension during MAP only with the limited number of treaty partners with which India has a Memorandum of Understanding under the MAP Article; otherwise domestic law and CBDT instructions govern stay of demand. Secondary adjustments must form part of the MAP resolution where the primary transfer pricing adjustment was made in financial year 2016-17 or thereafter. Part D fixes the implementation clocks and carries the exception that a MAP outcome cannot be implemented where an ITAT order for the same year comes to the competent authorities' knowledge after the MAP has been resolved or is pronounced after resolution but before implementation, in which case correlative relief is sought from the treaty partner for the adjustments sustained by the ITAT. Part E imposes a duty of true disclosure in Form 34F and a continuing duty to keep the competent authorities up to date on all material changes, good faith action being described as the hallmark of alternate dispute resolution under MAP. In the words reproduced by the source cited on this page: "India follows a liberal regime where the taxpayer can choose to pursue both appeal and MAP proceedings simultaneously."
It was decided by the CBDT Circulars & Instructions on 2022-06-10 and is reported as F. No. 500/09/2016-APA-I dated 10 June 2022, MAP GUIDANCE/2022, 22 pages, in five Parts A to E. It updates the MAP Guidance dated 7 August 2020.. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section Rule 44G, section 90, section 90A, section 201, section 92(3), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. The Guidance is administrative and not legislative: it states that if any element of it conflicts with domestic legislation, rules, instructions and circulars in India or with India's DTAAs, those provisions prevail. Part B gives wide access, covering transfer pricing adjustments, the existence of a permanent establishment, attribution of profits to a permanent establishment, characterisation or re-characterisation of income and expenses including royalties, fees for technical services and interest, cases involving domestic anti-abuse provisions and s.201 withholding disputes after the assessment order stage. Access is given but the outcome is limited where the taxpayer has a unilateral APA (the terms of the UAPA are not changed and correlative relief is sought from the treaty partner instead), where safe harbour applies (the arm's length price of the covered transactions is not changed), where an ITAT order on merits exists, and where an Indian taxpayer has settled a transfer pricing case under Vivad se Vishwas (no deviation from the VsV result; correlative relief is sought instead). Access is denied where the application is out of time under the MAP Article, where the objection is found not to be justified, where the application is not complete in all respects and the defects are not cured, where a settlement order of the ITSC or an advance ruling of the AAR covering the same issues has been obtained or an application is under examination, where a non-resident taxpayer opted for VsV on the same issue, and in respect of issues purely governed by India's domestic law. It arises in Appeals, Assessment & Scrutiny, How Tax Law Is Read and Demand, Recovery & Stay matters, on section Rule 44G, section 90, section 90A, section 201, section 92(3) of the Income Tax Act 1961, and was decided by Issued over the signature of Smarak Swain, Director (APA), Central Board of Direct Taxes. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Before applying, check the disqualifying routes: a settlement order from the Income-tax Settlement Commission or an advance ruling on the same issues bars access, and a non-resident who opted for Vivad se Vishwas on the same issue has given up the right to MAP. Decide whether to let the Tribunal appeal go to hearing. A final ITAT order on merits shuts the MAP down, so if the bilateral outcome is worth more, seek adjournments rather than a decision, and tell the competent authorities immediately if an ITAT order is passed. File in Form 34F and answer item (k) fully, including any adjustment made by the treaty partner on the same transaction; the Guidance treats a one-sided disclosure as blind-siding the negotiation. If a bilateral outcome is reached, communicate acceptance within 30 days of the competent authority's communication and file evidence of withdrawal of the domestic appeals within that period; the Assessing Officer then has one month from the end of the month in which he receives the competent authority's letter to give effect to it.
Searched for later treatment; none was found. That is not the same as a source affirming it. This is the consolidated MAP Guidance dated 10 June 2022, which itself updates the MAP Guidance dated 7 August 2020. No later CBDT instrument revising, withdrawing or replacing it was located. The Guidance states that where any element of it conflicts with domestic legislation, rules, instructions or circulars, or with India's DTAAs, those provisions prevail, so it must always be read behind Rule 44G and the relevant treaty Article. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Parts A and B were read from the CBDT's own copy on incometaxindia.gov.in. Later attempts to open that same file were refused by the site, so Parts C, D and E were read from a copy of the same government document hosted at usindiataxforum.org; it carries the same F. No. 500/09/2016-APA-I, the same date of 10 June 2022 and the same 22-page extent, and the same five-part structure. The Guidance quotes Rule 44G(1) in terms; it also states the 30-day period for the taxpayer to communicate acceptance and file evidence of withdrawal of domestic appeals, and the period of one month from the end of the month in which the Assessing Officer receives the competent authority's letter for giving effect to the resolution, but the sub-rules of Rule 44G that carry those two periods could not be pinned down from the copies read, so they are stated here as the Guidance states them. Part B's treatment of access turns in part on the Income-tax Settlement Commission and on the Authority for Advance Rulings; the statutory position of both bodies has changed since 2020 and a reader should check the current position rather than assume those paragraphs still operate as written. The Guidance does not deal with bank guarantees, and it does not address repatriation of funds in Part C; the only related provision found is in Part D, permitting tax paid on a s.201 demand on the Indian payer to be adjusted against the non-resident payee's liability on a MAP resolution. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Guidance is administrative and not legislative: it states that if any element of it conflicts with domestic legislation, rules, instructions and circulars in India or with India's DTAAs, those provisions prevail. Part B gives wide access, covering transfer pricing adjustments, the existence of a permanent establishment, attribution of profits to a permanent establishment, characterisation or re-characterisation of income and expenses including royalties, fees for technical services and interest, cases involving domestic anti-abuse provisions and s.201 withholding disputes after the assessment order stage. Access is given but the outcome is limited where the taxpayer has a unilateral APA (the terms of the UAPA are not changed and correlative relief is sought from the treaty partner instead), where safe harbour applies (the arm's length price of the covered transactions is not changed), where an ITAT order on merits exists, and where an Indian taxpayer has settled a transfer pricing case under Vivad se Vishwas (no deviation from the VsV result; correlative relief is sought instead). Access is denied where the application is out of time under the MAP Article, where the objection is found not to be justified, where the application is not complete in all respects and the defects are not cured, where a settlement order of the ITSC or an advance ruling of the AAR covering the same issues has been obtained or an application is under examination, where a non-resident taxpayer opted for VsV on the same issue, and in respect of issues purely governed by India's domestic law.
TaxSphere, “CBDT MAP Guidance 2022”, https://taxnotice.vittsphere.com/caselaw/case/cbdt-map-guidance-2022-access-denial-simultaneous-appeal-and-implementation/ (validity last checked 2026-09-16)
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The TPO says my advertising spend is higher than comparables and has added the excess as brand building for my foreign parent. Can he do that?
The competent authorities have settled your case under the mutual agreement procedure and the department still will not give effect to it. What order will the court make?
My transfer pricing dispute has been settled under MAP and I want to withdraw my appeal. The department has its own cross-appeal before the Tribunal. Does that survive?
Your MAP resolution has come through while cross appeals are pending before the Tribunal. What happens to the appeals, and who has to withdraw what?
