CA MANEET PAL SINGH
Foreign companies or firms or an association of individuals does not file a return of income with regard to its liaison office on the ground that no business activity is allowed to be carried out in India. In order to inquire about regular information from non-resident entities in respect of the kind of activities conducted by their liaison offices in India, the Government of India in the Union Budget 2011 had introduced Section 285 to the Income Tax Act. As per this section non-resident entities having liaison offices in India are required to submit prescribed annual statement in respect of their activities to the tax authorities within 60 days from the end of the financial year.
Section 285 was made effective from 1 June 2011, but the form was not notified by the board. Recently, CBDT has notified the form by introducing Rule 114DA and Form No. 49C to the Income-tax Rules, 1962. The annual statement shall be duly verified by the Chartered Accountant or the Authorised Signatory of the non-resident entity. Further, as per the Rule, the annual statement in Form 49C shall be furnished in electronic form along with digital signature. The rules and form shall come in force from 1 April 2012. It appears that there may be increased questioning on the activities of the liaison office in India. Therefore, permanent establishment exposure, etc, should be carefully ascertained before filing such information.
Specimen of Form 49C is given below
“FORM No. 49C
[See rule 114DA]
Annual Statement under section 285 of the Income-tax Act, 1961
| S No. | Particulars | Details |
| 1 | Financial Year for which the Statement is being submitted | |
| 2 | Name and Principal Address of the non- resident person in India | |
| 3 | Head Office Address of the non-resident person | |
| 4 | Permanent Account Number (if Allotted) | |
| 5 | Tax Identification No., if any, of country of Incorporation or residence | |
| 6 | Liaison Office (L.O.) Registration No. granted by RBI | |
| 7 | Nature of activities undertaken by L.O. | |
| 8 | Date of opening of L.O. in India | |
| 9 | Date of RBI approval for L.O. opening | |
| 10 | Address of L.O./L.O.s in India | |
| 11 | Date of submitting Annual Activity Certificate (AAC) for the Financial Year to RBI | |
| 12 | Name, address and Membership No. of the Chartered Accountant signing the Annual Activity Certificate (AAC) as prescribed by RBI | |
| 13 | India specific financial details for the financial year i.e., receipts, income and expenses of the non-resident person from or in India (not only of the L.O.) | |
| 14 | Details of all purchases, sales of material, and services from/to Indian parties during the year by the non-resident person (not limited to transactions made by (L.O.) | |
| 15 | Name & Designation of Officer In charge for each Office of the non-resident person in India | |
| 16 | Details of any salary or compensation of any sort payable outside India to any employee working in India or for services rendered in India | |
| 17 | Total Number of employees working in the LO/L.O.s during the year. Particulars of employees drawing salary of Rs. 50,000 or above per month specifying their Name Designation and sitting location | |
| 18 | Details (with complete addresses Including PAN) of agents/representative/distributors of the non-resident person in India. | |
| 19 | Names & addresses of the top five parties in India with whom the L.O. has been doing the liaisoning | |
| 20 | Details of Products or services for which liaisoning activity is done by the L.O. | |
| 21 | Details of any other entity (including PAN, if any) for which liaisoning activity is done by the (L.O.) | |
| 22 | Details of Group entities (with addresses and PAN, if any) present in India as Branch Office/Companies/LLPs etc., incorporated in India and nature their business activities. | |
| 23 | Details (with addresses) of other L.O.s of the Group entities in India | |
| 24 | Other Group entities operating from the same premises as the office of the L.O. |
VERIFICATION
I, ……… [full name in block letters] …………………. son/daughter of ………………………………….. holding Permanent Account Number…………………………………………..……………………….. solemnly declare that to the best of my knowledge and belief, the information given in the form is correct and complete and that the other particulars shown therein ore truly stated. I further declare that I am submitting this form in my capacity as ………………………. and I am also competent to make this submission and verify it.
Verified today the ……………. day of ……………..
Place
Signature of Authorised Signatory
Name ……………………………………..”
Authored by
CA MANEET PAL SINGH
9810774806
1. Would this apply to FY 31 March 2012? 2. Has DG IT Systems specified the procedure for electronic filing?