What the courts have decided on section 144BA(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Manipal Education and Medical Group India Pvt Ltd v ACIT — where the s.148 reassessment falls, the s.144BA(1) and (2) GAAR notices issued inside it fall with it as consequential
High CourtHelps taxpayerValidity unconfirmed
The GAAR reference in my case was made inside a reassessment. If I succeed in getting the s.148A(d) order and the s.148 notice set aside, do the s.144BA notices go too, or do I have to fight them separately?
They go with it. In a writ petition in which the Revenue itself accepted, through the Additional Solicitor General, that the matter should be remanded to the stage before the s.148 notice because the principles of natural justice had been violated, the Karnataka High Court set aside the s.148A(d) order and the s.148 notice, both dated 31 March 2022, and then quashed "all actions initiated pursuant to the above under Section 142(2A), Section 144BA(1) and Section 144BA(2) of the Act, being consequential" — naming a notice dated 21 March 2023, an order dated 30 March 2023, a notice dated 24 March 2023 for invocation of Chapter X-A and a further notice dated 26 April 2023. The matter was remanded to the Assessing Officer to begin again from the s.148A(b) stage, with thirty days to reply, and all contentions of both parties kept open.
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Statutory position — the GAAR procedure: section 144BA, Rules 10UB and 10UC, and the Approving Panel whose direction binds both sides
CBDT Circulars & InstructionsCuts both ways
My client has received a notice under Chapter X-A saying his arrangement may be an impermissible avoidance arrangement. What is the procedure from here, who actually decides, and can I appeal the decision?
GAAR cannot be applied by the Assessing Officer on his own. He must refer the matter to the Principal Commissioner or Commissioner under s.144BA(1) in Form No. 3CEG after first putting a written notice to the assessee under Rule 10UB(1); the Principal Commissioner then issues his own notice under s.144BA(2) giving the assessee up to sixty days to object and a hearing, and either drops the matter in Form No. 3CEH or refers it to the Approving Panel in Form No. 3CEI. The Approving Panel's direction under s.144BA(6) is binding on the assessee and on the Commissioner and his subordinates, and s.144BA(14) bars any appeal under the Act against that direction — the only route against it is a writ.
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Statutory position — s.153 Explanation 1(xi): the limitation clock stops from the day the GAAR reference reaches the Commissioner until his direction or the Panel's comes back, and then never leaves less than sixty days
CBDT Circulars & InstructionsCuts both ways
A reference under s.144BA has been made in my case and months have gone by. Does the ordinary time limit for completing the assessment keep running while the Approving Panel sits on it?
No. Clause (xi) of Explanation 1 to s.153 excludes from the limitation period "the period commencing from the date on which a reference for declaration of an arrangement to be an impermissible avoidance arrangement is received by the Principal Commissioner or Commissioner under sub-section (1) of section 144BA and ending on the date on which a direction under sub-section (3) or sub-section (6) or an order under sub-section (5) of the said section is received by the Assessing Officer". The clock therefore stops on receipt of the Assessing Officer's reference and restarts only when the outcome — the Commissioner's own direction under s.144BA(3), the Approving Panel's direction under s.144BA(6), or the Commissioner's order under s.144BA(5) dropping the matter — reaches the Assessing Officer. The proviso that follows the Explanation then gives the officer at least sixty days: if what is left after the exclusion is less than sixty days, the remaining period is extended to sixty days.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.