Rationalisations of provisions relating to maintenance, keeping and furnishing of information and documents by certain persons entering into an international transaction or specified domestic transaction

Section 92D of the Act inter alia, provides for maintenance and keeping of information and document by persons entering into an international transaction or specified domestic transaction in the prescribed manner.

Sub-section (1) of section 92D provides that every person who has entered into an international transaction or specified domestic transaction shall keep and maintain the prescribed information and document in respect thereof.

Proviso to said section inserted through the Finance Act, 2016 provides that the person, being a constituent entity of an international group, shall also keep and maintain such information and document in respect of an international group as may be prescribed. Accordingly, Rule 10DA, prescribed for this purpose, provides the requisite information to be furnished in prescribed form, subject to the thresholds of the consolidated group revenue and the international transaction.

It is proposed to substitute section 92D of the Act, in order to provide that the information and document to be kept and maintained by a constituent entity of an international group, and filing of required form, shall be applicable even when there is no international transaction undertaken by such constituent entity.

It is also proposed to provide that information shall be furnished by the constituent entity of an international group to the prescribed authority.

This amendment will take effect from the 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years.

[Clause 31]

Extract of Clause 31 of Finance Bill 2019

31. Substitution of section 92D.

In the Income-tax Act, for section 92D, the following section shall be substituted with effect from the 1st day of April, 2020, namely:––

Maintenance,keeping and furnishing of information and document by certain persons.

‘92D. (1) Every person,––

(i) who has entered into an international transaction or specified domestic transaction shall keep and maintain such information and document in respect thereof as may be prescribed;

(ii) being a constituent entity of an international group, shall keep and maintain such information and document in respect of an international group as may be prescribed.

Explanation.––For the purposes of this clause,––

(A) “constituent entity” shall have the meaning assigned to it in clause (d) of sub-section (9) of section 286;

(B) “international group” shall have the meaning assigned to it in clause (g) of sub-section (9) of section 286.

(2) Without prejudice to the provisions contained in sub-section (1), the Board may prescribe the period for which the information and document shall be kept and maintained under the said sub-section.

(3) The Assessing Officer or the Commissioner (Appeals) may, in the course of any proceeding under this Act, require any person referred to in clause (i) of sub-section (1) to furnish any information or document referred therein, within a period of thirty days from the date of receipt of a notice issued in this regard:

Provided that the Assessing Officer or the Commissioner (Appeals) may, on an application made 45 by such person, extend the period of thirty days by a further period not exceeding thirty days.

(4) The person referred to in clause (ii) of sub-section (1) shall furnish the information and document referred therein to the authority prescribed under sub-section (1) of section 286, in such manner, on or before such date, as may be prescribed.’.

Note on Clause 31 of Finance Bill 2019

Clause 31 of the Bill seeks to substitute section 92D of the Income-tax Act relating to maintenance and keeping of information and document by persons entering into an international transaction or specified domestic transition.

The proposed section seeks to provide for the maintenance, keeping and furnishing of information and document by certain persons.

Sub-section (1) of the proposed section provides for keeping and maintaining of prescribed information and document by the person entering into an international transaction or specified domestic transaction, and by the constituent entity of an international group referred to in section 286.

Sub-section (2) of the proposed section empowers the Board to prescribe the period for which said information and document shall be kept and maintained.

Sub-section (3) of the proposed section provides that the Assessing Officer or the Commissioner (Appeals) may, in the course of any proceeding under this Act, require any person referred to in clause (i) of sub-section (1) to furnish any information or document referred therein, within a period of thirty days from the date of receipt of a notice issued in this regard which may be further extended upto thirty days on such person’s application.

Sub-section (4) of the proposed section provides that the constituent entity referred to in clause (ii) of sub-section (1) shall furnish the information and document referred therein to the authority prescribed under sub-section (1) of section 286, in such manner, on or before such date as may be prescribed.

These amendments will take effect from the 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years.

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