Rule 98 sets how an eligible assessee exercises the domestic safe harbour: Form No. 49 with the return, verification by the Assessing Officer, a written order if the option is invalid, objections to the Commissioner within fifteen days, and deemed validity if the authorities miss the time limits.
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Rules 2026 · Rule 98
Procedure governing safe harbour rules for specified domestic transactions
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 for that year is furnished on or before the date Form No. 49 is furnished.
Verification (sub-rules 2 to 4). The Assessing Officer verifies that the assessee is an eligible assessee and the transaction is an eligible specified domestic transaction before the option is treated as validly exercised, and may call for information in writing. The Assessing Officer, by written order after a reasonable opportunity of being heard, declares the option invalid if the information is not furnished, the assessee or the transaction is not eligible, or the tariff does not accord with rule 97.
Objections (sub-rules 5 and 6). The assessee may file objections with the Principal Commissioner or Commissioner to whom the Assessing Officer is subordinate within fifteen days of receiving the order. That authority decides after a reasonable opportunity of being heard and serves the order on the assessee and the Assessing Officer.
Time limits (sub-rules 7 and 8). The Assessing Officer's order cannot be made after three months from the end of the month in which Form No. 49 is received; the Principal Commissioner's or Commissioner's order is passed within two months from the end of the month in which the objection is received. If no order is passed in time, the option is treated as valid.
Other points (sub-rules 9 and 10). 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. The Assessing Officer may make a reference under section 166 for a specified domestic transaction that is not eligible.