Rule 90 sets how an assessee exercises the safe harbour option for transactions other than IT services — Form No. 49 with the return, verification by the Assessing Officer, a reference to the Transfer Pricing Officer, time limits, and deemed validity if the authorities are late.
90
Rules 2026 · Rule 90
Procedure relating to transactions other than provision of information technology services
Rules 77-130
Exercising the option (sub-rule 1). The assessee furnishes Form No. 49, complete in all respects, to the Assessing Officer on or before the due date under section 263(1)(c) for the relevant tax year, and the return of income for that year is furnished on or before the date Form No. 49 is furnished. Form No. 49 is furnished electronically under digital signature or electronic verification code and verified by the person authorised to verify the return under section 265 (sub-rule 11).
Verification and reference (sub-rules 2 to 5). The Assessing Officer verifies that the assessee is an eligible assessee and the transaction is an eligible international transaction before the option is treated as validly exercised. If in doubt, the Assessing Officer refers the matter to the Transfer Pricing Officer, who may require information in writing. The Transfer Pricing Officer declares the option invalid, by written order after a reasonable opportunity of being heard, if the information is not furnished or the assessee or the transaction is not eligible.
Objections (sub-rules 6 and 7). The assessee may object to the Commissioner within fifteen days of receiving the order; the Commissioner decides after a reasonable opportunity of being heard.
Where the option is valid (sub-rule 8). The Assessing Officer verifies that the declared transfer price accords with rule 89(2) and, if not, adopts the operating profit margin, rate of interest or commission specified there.
Time limits (sub-rules 9 and 10). No reference by the Assessing Officer after two months from the end of the month in which Form No. 49 is received; no order by the Transfer Pricing Officer after two months from the end of the month in which the reference is received; and the Commissioner's order within two months from the end of the month in which the objection is received. If an authority does not act within the time specified, the option is treated as valid.
Other transactions (sub-rule 12). The Assessing Officer may make a reference under section 166 for an international transaction that is not an eligible international transaction.