98. Procedure governing safe harbour rules for specified domestic transactions.—

(1) For the purposes of exercising of the option for safe harbour, —

(a) the assessee shall furnish Form No. 49, complete in all respects, to the Assessing Officer on or before the due date specified in section 263(1)(c) for furnishing the return of income for the relevant tax year; and

(b) the return of income for the relevant tax year is to be furnished by the assessee on or before the date of furnishing of Form No. 49.

(2) On receipt of Form No. 49, the Assessing Officer shall verify whether—

(a) the assessee exercising the option is an eligible assessee; and

(b) the transaction in respect of which the option is exercised is an eligible specified domestic transaction, before the option for safe harbour by the assessee is treated to be validly exercised.

(3) Where the Assessing Officer doubts the valid exercise of the option for the safe harbour by an assessee, he may require the assessee, by notice in writing, to furnish such information or documents or other evidence as he may consider necessary, and the assessee shall furnish the same within the time specified in such notice.

(4) Where —

(a) the assessee does not furnish the information or documents or other evidence required by the Assessing Officer; or (b) the Assessing Officer finds that the assessee is not an eligible assessee; or

(c) the Assessing Officer finds that the specified domestic transaction in respect of which the option referred to under sub-rule (1) has been exercised is not an eligible specified domestic transaction; or

(d) the tariff is not in accordance with the circumstances specified under rule 97, the Assessing Officer shall, by order in writing, declare the option exercised by the assessee under sub-rule (1) to be invalid, after giving a reasonable opportunity of being heard to the assessee, and cause a copy of the said order to be served on the assessee.

(5) If the assessee objects to the order of the Assessing Officer under sub-rule (4) declaring the option to be invalid, he may file his objections with the Principal Commissioner or the Commissioner, as the case may be, to whom the Assessing Officer is subordinate, within fifteen days of receipt of the order of the Assessing Officer.

(6) On receipt of the objection referred to in sub-rule (5), the Principal Commissioner or the Commissioner, as the case may be, shall after providing a reasonable opportunity of being heard to the assessee, pass appropriate orders in respect of the validity or otherwise of the option exercised by the assessee and cause a copy of the said order to be served on the assessee and the Assessing Officer.

(7) For the purposes of this rule, —

(a) no order under sub-rule (4) shall be made by an Assessing Officer after expiry of a period of three months from the end of the month in which Form No. 49 is received by him; and

(b) the order under sub-rule (6) shall be passed by the Principal Commissioner or Commissioner, as the case may be, within a period of two months from the end of the month in which the objection filed by the assessee under sub-rule (5) is received by him.

(8) If the Assessing Officer or the Principal Commissioner or the Commissioner, as the case may be, does not pass an order within the time specified under sub-rule (7), then the option for safe harbour exercised by the assessee shall be treated as valid.

(9) Form No. 49 shall be furnished electronically either under digital signature or through electronic verification code and shall be verified by the person who is authorised to verify the return of income of the assessee under section 265.

(10) The Assessing Officer may make a reference under section 166 in respect of specified domestic transaction other than the eligible specified domestic transaction.