From: CA Saiprasad Bagrecha <saiprasadbagrecha@gmail.com>
3. The circumstances under which prior permission u/s 281 should be granted by the
Assessing Officers are as follows:
(i) If there is no demand outstanding and there is no likelihood of demand arising in
the next six months, then the permission should be granted.
(ii) If undisputed demand is outstanding and there is no likelihood of demand arising
in next 6 months, then the taxpayer should pay the same along with interest due
thereon and then permission should be granted.
(iii) If there is disputed demand outstanding, then the taxpayer should obtain stay for
the same and indemnify the outstanding demand by way of bank guarantee or
sufficient assets or by Department retaining the first charge on the assets proposed to
be transferred or on which such charge is being created, to the extent of such demand.
Thereafter, the permission u/s 281 would be granted by the A.O.
(iv) If demand is likely to arise in the next six month, then the A.O. should explore
the possibility of action prescribed u/s 281B.
4. There would be only one level of intervention i.e., at the level of the range head for
granting permission. The cases in which A.O. would require such approval would be where
(a) value of assets being transferred or on which charge is being created, or
(b) the amount of charge being created is Rs. Ten crores or more.
5. The timelines for granting/refusing permission u/s 281 by the A.O. are as follows:
(i) If there is no demand outstanding and there is no likelihood of demand arising in
the next six months, then the A.O. should grant the permission within ten working
days of the receipt of the application.
(ii) If undisputed demand is outstanding and there is no likelihood of demand arising
in next 6 months, then the A.O. should grant permission within ten working days of
payment as in para 3(ii) above.
(iii) If there is disputed demand outstanding and the taxpayer has obtained stay and
indemnified the demand, then the A.O. should grant the permission within ten
working days of the indemnification of the demand.
(iv) If demand is likely to arise in the next six months and the A.O. is considering
actions prescribed u/s 281B for the assets excluding the asset under consideration,
then the A.O. should grant the permission within fifteen working days of the receipt
of the application.
(v) If the taxpayer does not pay the undisputed outstanding demand or his application
for stay of disputed demand is rejected or he is unable to indemnify the outstanding
demand, the application shall be disposed of within a period of ten working days. In
case the permission is not being granted, a speaking and reasoned order conveying
refusal would be issued with the approval of the Range head within ten working days
of expiry of time given to the taxpayer to pay the undisputed demand or rejection of
his stay application, as the case may be.
These time limits should be followed scrupulously by the A.Os.
6. The validity of the letter granting permission u/s 281 would be:
(i) One hundred and eighty days from the date of issue of approval, or
(ii) Service of order of attachment u/s 281B whichever is earlier.
7. Once the asset is transferred or charge is created, the taxpayer should submit the
documents, in this regard, to the A.O. for his record.
8. This circular shall come into force with immediate effect.
Form I.T.N.S. 281 Application u/s 281 of IT Act,
1961
DATE OF APPLICATION
To,
The Assessing Officer,
………………………..
………………………..
………………………..
I/M/S ……………………………………………………………………. (name of the assesse
in block letters) son/daughter of …………………….do, hereby, request that permission may
be granted under clause (ii) of the proviso to section 281 creating a charge on, or to part with
the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer
whatsoever) of asset(s) given in D4 of Part D below in favour of person(s) to be mentioned in
D1 of Part D below.
Circular No. 4/2011, Dated: 19-7-2011
Section 281 of the Income-tax Act, 1961 – Certain transfers to be Void – Guidelines for
Prior permission under section 281 to create a charge on the Assets of Business
References have been received by the Board regarding issuance of guidelines for granting of
prior permission u/s 281 of the IT Act, 1961 to transfer or create a charge on the assets of the
assessee. The Board has considered the matter and in order to have uniformity on the issue, it
has been decided that:
1. The taxpayers should apply in the prescribed form annexed hereto titled "Application u/s
281 of the IT Act, 1961" which would be available on the departmental website, as well as
with the Assessing Officers.
2. The taxpayer would have to file the form at least thirty days prior to the proposed date of
transaction.
Prior permission under section 281 to create a charge on the Assets of Business
References have been received by the Board regarding issuance of guidelines for granting of
prior permission u/s 281 of the IT Act, 1961 to transfer or create a charge on the assets of the
assessee. The Board has considered the matter and in order to have uniformity on the issue, it
has been decided that:
1. The taxpayers should apply in the prescribed form annexed hereto titled "Application u/s
281 of the IT Act, 1961" which would be available on the departmental website, as well as
with the Assessing Officers.
2. The taxpayer would have to file the form at least thirty days prior to the proposed date of
transaction.
3. The circumstances under which prior permission u/s 281 should be granted by the
Assessing Officers are as follows:
(i) If there is no demand outstanding and there is no likelihood of demand arising in
the next six months, then the permission should be granted.
(ii) If undisputed demand is outstanding and there is no likelihood of demand arising
in next 6 months, then the taxpayer should pay the same along with interest due
thereon and then permission should be granted.
(iii) If there is disputed demand outstanding, then the taxpayer should obtain stay for
the same and indemnify the outstanding demand by way of bank guarantee or
sufficient assets or by Department retaining the first charge on the assets proposed to
be transferred or on which such charge is being created, to the extent of such demand.
Thereafter, the permission u/s 281 would be granted by the A.O.
(iv) If demand is likely to arise in the next six month, then the A.O. should explore
the possibility of action prescribed u/s 281B.
4. There would be only one level of intervention i.e., at the level of the range head for
granting permission. The cases in which A.O. would require such approval would be where
(a) value of assets being transferred or on which charge is being created, or
(b) the amount of charge being created is Rs. Ten crores or more.
5. The timelines for granting/refusing permission u/s 281 by the A.O. are as follows:
(i) If there is no demand outstanding and there is no likelihood of demand arising in
the next six months, then the A.O. should grant the permission within ten working
days of the receipt of the application.
(ii) If undisputed demand is outstanding and there is no likelihood of demand arising
in next 6 months, then the A.O. should grant permission within ten working days of
payment as in para 3(ii) above.
(iii) If there is disputed demand outstanding and the taxpayer has obtained stay and
indemnified the demand, then the A.O. should grant the permission within ten
working days of the indemnification of the demand.
(iv) If demand is likely to arise in the next six months and the A.O. is considering
actions prescribed u/s 281B for the assets excluding the asset under consideration,
then the A.O. should grant the permission within fifteen working days of the receipt
of the application.
(v) If the taxpayer does not pay the undisputed outstanding demand or his application
for stay of disputed demand is rejected or he is unable to indemnify the outstanding
demand, the application shall be disposed of within a period of ten working days. In
case the permission is not being granted, a speaking and reasoned order conveying
refusal would be issued with the approval of the Range head within ten working days
of expiry of time given to the taxpayer to pay the undisputed demand or rejection of
his stay application, as the case may be.
These time limits should be followed scrupulously by the A.Os.
6. The validity of the letter granting permission u/s 281 would be:
(i) One hundred and eighty days from the date of issue of approval, or
(ii) Service of order of attachment u/s 281B whichever is earlier.
7. Once the asset is transferred or charge is created, the taxpayer should submit the
documents, in this regard, to the A.O. for his record.
8. This circular shall come into force with immediate effect.
Form I.T.N.S. 281 Application u/s 281 of IT Act,
1961
DATE OF APPLICATION
To,
The Assessing Officer,
………………………..
………………………..
………………………..
I/M/S ……………………………………………………………………. (name of the assesse
in block letters) son/daughter of …………………….do, hereby, request that permission may
be granted under clause (ii) of the proviso to section 281 creating a charge on, or to part with
the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer
whatsoever) of asset(s) given in D4 of Part D below in favour of person(s) to be mentioned in
D1 of Part D below.
No comments:
Post a Comment