Draft Rule 108 of the Income-tax Rules, 2026 sets out the preliminary processing framework for Advance Pricing Agreement (APA) applications filed in Form No. 51. The application must be complete in all respects and accompanied by requisite documents. In the case of unilateral agreements, the Principal Chief Commissioner of Income-tax (International Taxation), and in bilateral or multilateral agreements, the competent authority of India, may issue a deficiency letter if defects are noticed, relevant documents are missing, or the application deviates from the understanding reached during the pre-filing consultation under rule 105. Such deficiency letter must be issued within one month from the end of the month in which the application is received. The applicant is required to rectify the defect or modify the application within 30 days of service of the deficiency letter. If the defect is not cured within the prescribed time, the authority may, after providing an opportunity of being heard, pass an order stating that the application shall not be proceeded with. Importantly, where an application is not allowed to proceed under this rule, the fee paid by the applicant shall be refunded. Overall, Rule 108 introduces a time-bound and fair mechanism to ensure that only complete and compliant APA applications move forward in the process.
Extract of Rule No. 108 of Draft Income-tax Rules, 2026
Rule 108
Preliminary processing of application.
(1) Application filed in Form No. 51 shall be complete in all respects and accompanied by requisite documents.
(2) The Principal Chief Commissioner of Income-tax (International taxation), in the case of a unilateral agreement and competent authority of India, in the case of bilateral or multilateral agreement shall serve a deficiency letter on the applicant, if¬¬—
(a) any defect is noticed in the application in Form No. 51; or
(b) any relevant document is not attached thereto; or
(c) the application is not in accordance with understanding reached in pre-filing consultation referred to in rule 105.
(3) The deficiency letter in sub-rule (2) shall be served on the applicant within one month from the end of the month in which the application has been received.
(4) The applicant shall remove the deficiency or modify the application within a period of 30 days from the date of service of the deficiency letter.
(5) The Principal Chief Commissioner of Income-tax (International Taxation) or the competent authority of India, as the case may be, on being satisfied, may pass an order providing that application shall not be allowed to be proceeded with if the application is defective and defect is not removed by applicant in accordance with sub-rule (4).
(6) The order referred to in sub-rule (5) shall be passed after providing an opportunity of being heard to the applicant.
(7) In a case where an application is not allowed to be proceeded with under sub-rule (5), the fee paid by the applicant shall be refunded.
