Circular No. 5

What it does

Corrects two date references in Circular No. 5/2010 dated 3 June 2010. In paragraph 37.5, the statement that the amendment applies with effect from 1 April 2009 and accordingly to assessment year 2009-10 and subsequent years is replaced by a statement that it applies with effect from 1 October 2009 and accordingly to all cases in which proceedings are pending before the Transfer Pricing Officer on or after that date. In paragraph 38.3, the date 1 October 2009 is to be read as 1 April 2009.

Why it was issued

It is a corrigendum in partial modification of Circular No. 5/2010; the text gives no other reason.

Who it reaches

Assessees with transfer pricing proceedings pending before a Transfer Pricing Officer on or after 1 October 2009
Transfer Pricing Officers applying the amendment dealt with in paragraph 37.5
Readers relying on Circular No. 5/2010 for the effective dates of Finance Act amendments

The instrument, as the Board published it

The department publishes this one only as a PDF, so the words below were read out of that PDF by machine. That reading can carry its own mistakes — a misread number, a broken line. Check the signed document before you rely on a figure in it.

F.No.142/13/2010-SO (TPL) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, the 30th September, 2010 CORRIGENDUM No.__________(F.No.142/13/2010-SO(TPL). In partial modification of Circular No.5 / 2010 dated 03.06.2010, (i) in para 37.5 of the said Circular, for the lines "the above amendment has been made applicable with effect from 1st April, 2009 and will accordingly apply in respect of assessment year 2009-10 and subsequent years." the following lines shall be read; "the above amendment has been made applicable with effect from 1st October 2009 and shall accordingly apply in relation to all cases in which proceedings are pending before the Transfer Pricing Officer (TPO) on or after such date." (ii) in para 38.3, for the date "1st October, 2009", the following date shall be read : "1st April, 2009". ( Pawan K. Kumar ) Director (TPL-IV) Corrigendum No.5/2010 (F.No.142/13/2010-SO(TPL) Copy to: 1. PS to FM/OSD to FM/OSD to MoS(R). 2. PS to Secretary (Revenue)/OSD to Advisor to FM. 3. The Chairman, Members and all officers in CBDT of the rank of Under Secretary and above. 4. All Chief Commissioners / Director General of Income-tax – with a request to circulate amongst all officers in their regions / charges. 5. DGIT (Systems) / DGIT(Vigilance)/DGIT(Admn.)/DG(NADT) / DGIT (L&R). 6. Media Coordinator and Official Spokesperson of CBDT. 7. DIT(IT) / DIT(RSP & PR) / DIT(Audit)/ DIT(Vig.) / DIT(Systems) / DIT(O&MS)/DIT (Spl.Inv.) 8. The Comptroller and Auditor General of India (30 copies). 9. Joint Secretary and Legal Advisor, Ministry of Law and Justice, New Delhi. 10. The Institute of Chartered Accountants of India, IP Estate, New Delhi. 11. All Chambers of Commerce as per usual mailing list.

What to watch

The two corrections pull in opposite directions, so read each paragraph against its own corrected date rather than assuming one date for both.
The corrected test in paragraph 37.5 is not the assessment year but whether proceedings were pending before the Transfer Pricing Officer on or after 1 October 2009, which can bring in earlier years.
This text does not reproduce the substance of paragraph 37.5 or 38.3, so it must be read with Circular No. 5/2010 to know which amendments are affected.

Where you meet it

You meet it in a transfer pricing matter where the applicability of an amendment is argued from the explanatory circular on the Finance Act, and the date in the circular as originally published is wrong.

What it names

It mentions. Circular No. 5/2010

← Circular No. 7/2010 · Circular No. [F. NO. 225/72/2010/IT(A-II)] →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.

What this is