Rule 10UB

Rule 10UB — the law in short

What the courts have decided on section Rule 10UB, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Statutory position — Rules 10UD, 10UE and 10UF: the Approving Panel stage — Form 3CEIA, four sets, circulation within seven days, and the notice of hearing to both sides CBDT Circulars & InstructionsCuts both ways
  The Commissioner has referred my case to the Approving Panel. What form does that reference take, what is the Panel obliged to do with it, and am I entitled to be heard?
  Three rules govern this stage and they are short. Rule 10UD requires the reference under s.144BA(4) to be "made in Form No. 3CEIA along with a copy of Form No. 3CEI and such other documents which the Principal Commissioner or the Commissioner deems fit" and to be "submitted in four sets, either in Hindi or English". Rule 10UE(1) requires the Chairperson of the Panel to cause the reference to be circulated among the other members "within seven days from the date of receipt of such reference". Rule 10UE(2) requires the Chairperson to "cause to be issued the notice to the Assessing Officer and the assessee affording an opportunity of being heard specifying therein the date and place of hearing" — so the taxpayer's right to be heard before the Panel is in the rules as well as in s.144BA(7). Rule 10UE(3) leaves the venue of the Panel's meetings to the Panel. Rule 10UF fixes the members' remuneration at a sitting fee of six thousand rupees per day plus travelling and daily allowances as admissible to an officer of the rank of Special Secretary to the Government of India, met from the budgetary grants of the Department of Revenue.
• 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.
• Statutory position — sections 100 and 101: Chapter X-A applies in addition to or in lieu of any other basis, and only in accordance with prescribed guidelines CBDT Circulars & InstructionsCuts both ways
  Can the department run GAAR and a specific anti-avoidance provision on the same transaction, and is there anything that limits how GAAR is applied?
  Section 100 provides that the provisions of Chapter X-A shall apply in addition to, or in lieu of, any other basis for determination of tax liability — so GAAR is not an alternative of last resort and can be invoked alongside, or instead of, a specific charging or anti-avoidance provision. Section 101 provides that the Chapter shall be applied in accordance with such guidelines and subject to such conditions as may be prescribed, and it is under that section that rules 10U to 10UC are made.

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.