What the courts have decided on section Rule 10RA, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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CBDT Circular No. 10/2015 — APA rollback
CBDT Circulars & InstructionsCuts both waysNo later treatment found
I want the four rollback years with my APA. Can I pick only the years that help me, and what will knock rollback out before I start?
You cannot pick and choose: the applicant has to either apply for all the four years or not apply at all, subject only to the transaction not existing in a year or the rollback conditions failing in a year. Rollback is not available for a year in which the return was filed under s.139(4), nor where the Tribunal has finally disposed of the appeal on the arm's length price of that transaction, and it can never reduce the total income or increase the loss declared in the return.
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s.92CC(4) — the five-year APA term and the year outside it
CBDT Circulars & InstructionsCuts both ways
My advance pricing agreement covers five years. What about the year just outside it - can the agreed margin be held against me, or held to my benefit, for that year?
Section 92CC(4) caps the agreement at such period not exceeding five consecutive previous years as may be specified in it, and s.92CC(3) gives the agreement its force only "in respect of which the advance pricing agreement has been entered into". Sub-section (9A) extends that backwards, but only so far: an agreement may, subject to prescribed conditions, determine the arm's length price or the attributable income for any period not exceeding four previous years preceding the first of the years covered by sub-section (4), and rule 10F(ha) calls those the rollback years. A year outside the five plus four is outside the agreement, and the Pune Bench has held in Tetra Pak India that the window works against the department too: the TPO may not benchmark an uncovered year against the margin agreed in the APA.
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Rule 10Q and Rule 10R — revision and cancellation of an APA
CBDT Circulars & InstructionsCuts both ways
The Board wants to revise, or to cancel, my advance pricing agreement. On what grounds can it, and what am I entitled to before it does?
Rule 10Q allows the Board to revise a concluded agreement on three grounds — a change in critical assumptions or failure to meet a condition, a change in law that modifies a matter covered by the agreement without making it non-binding, and a request from the competent authority of the other country in a bilateral or multilateral case. Except where the assessee himself asked for the revision, the agreement cannot be revised unless he has been heard and is in agreement with the proposed revision; if he is not, Rule 10Q(4) sends the matter to cancellation under Rule 10R. Rule 10R lists four cancellation grounds, requires an opportunity of being heard, and requires a written order giving reasons and specifying the date from which the cancellation takes effect.
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.
