TaxTMI 
TaxTMI 
Reference to Principal Commissioner or Commissioner in case of Applicability of GAAR - (New) Section 274 / (Old) Section 144BA
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....g:- • (a) details of the arrangement to which the provisions of Chapter XI are proposed to be applied; • (b) the tax benefit arising under the arrangement; • (c) the basis and reason for considering that the main purpose of the identified arrangement is to obtain tax benefit; • (d) the basis and the reasons why the arrangement satisfies the conditions in section 179(1)(a) to (d); and • (e) the list of documents and evidence relied upon in respect of clauses (c) and (d). Commissioner's Prima Facie Examination and Notice to the Assessee The Principal Commissioner or Commissioner shall, on receipt of a reference under section 274(1), if he is of the opinion that the provisions of Chapter XI are required to be invoked,-- • (a) issue a notice to the assessee, setting out the reasons and basis of such opinion, for submitting objections, if any; and • (b) provide an opportunity of being heard to the assessee within such period, not exceeding sixty days, as specified in the said notice. [ Section 274(2) ] Failure to File Objections - If the assessee fails to....
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....rections, as it deems fit, in respect of the declaration of the arrangement as an impermissible avoidance arrangement as per the provisions of Chapter XI; and • (b) specify the tax year or years to which such declaration of an arrangement as an impermissible avoidance arrangement shall apply. [ Section 274(6) ] Opportunity of Hearing before - • No direction shall be issued unless an opportunity of being heard is given to the assessee and • the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interests of the revenue, as the case may be. [ Section 274(7) ] Investigative Powers of the Approving Panel - The Approving Panel may, before issuing any direction,- • (a) if it is of the opinion that any further inquiry in the matter is necessary, direct the Principal Commissioner or Commissioner to make such inquiry or cause the inquiry to be made by any other income-tax authority and furnish a report containing the result of such inquiry to it; or • (b) call for and examine such records relating to the matter as it deems fit; or • (c) requ....
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....the authority competent under an agreement referred to in section 159 and ending with the date on which the information so requested is last received by the Approving Panel or one year, whichever is less; • (b) the period commencing on the date on which the proceeding of the Approving Panel is stayed by an order or injunction of any court and ending on the date on which certified copy of the order vacating the stay was received by the Approving Panel. [ Section 274(14) ] Extension of Residual Period to Sixty Days • If immediately after the exclusion of the period, the remaining period available to the Approving Panel for issue of directions is less than sixty days, • such remaining period shall be extended to sixty days and • the period of six months mentioned in section 274(13) shall be deemed to have been extended accordingly. [ Section 274(15) ] Binding Effect of Approving Panel's Directions [ Section 274(16) & (17) ] • The directions issued by the Approving Panel under section 274(6) shall be binding on- • (a) the assessee; and • (b) the Principal....
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....; the Assessing Officer, at any stage of the assessment or reassessment proceedings before him. • Must be based on material evidence - The Assessing Officer having regard to the material and evidence available considers that it is necessary to declare an arrangement as an impermissible avoidance arrangement. • Determination of Consequences - to determine the consequence of such an arrangement within the meaning of Chapter X-A, The Assessing Officer shall, before making a reference to the Commissioner, issue a notice in writing to the assessee seeking objections, if any, to the applicability of provisions of Chapter X-A in his case. The notice shall contain the following: - • (i) details of the arrangement to which the provisions of Chapter X-A are proposed to be applied; • (ii) the tax benefit arising under the arrangement; • (iii) the basis and reason for considering that the main purpose of the identified arrangement is to obtain tax benefit; • (iv) the basis and the reasons why the arrangement satisfies the condition provided in clause (a), (b), (c) or (d)....
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....Panel Powers of Approving Panel - The Approving Panel, on receipt of a reference from the Principal Commissioner or Commissioner, shall issue such directions, as it deems fit, in respect of • the declaration of the arrangement as an impermissible avoidance arrangement in accordance with the provisions of Chapter X-A • including specifying of the previous year or years to which such declaration of an arrangement as an impermissible avoidance arrangement shall apply. [ Sub section (6) ] Mandatory Hearing before Adverse Directions - The Panel cannot issue prejudicial directions without hearing both: • assessee • Assessing Officer. [ Sub section 7 ] Investigative Powers of Approving Panel - The Approving Panel may, before issuing any direction- • (i) if it is of the opinion that any further inquiry in the matter is necessary, direct the Principal Commissioner or Commissioner to make such inquiry or cause the inquiry to be made by any other income-tax authority and furnish a report containing the result of such inquiry to it; or • (ii) call for and examine such records relati....