Section 91 — Procedure relating to transactions of provision of information technology services

(1) Where option for safe harbour is exercised in respect of eligible international transaction being provision of information technology services, suchoption for safe harbour, once exercised validly, shall continue to remain in force for a period of five consecutive tax years.
(2) For the purposes of safe harbour in respect of eligible international transaction referred to in sub-rule (1), the threshold of two thousand crore rupees of theaggregate operating revenue shall be tested for the first of the five consecutive tax years.
(3) For exercising option for safe harbour, the assessee shall furnish Form No. 49, complete in all respects, to the Director General of Income-tax (Systems)for the first of the five consecutive tax years for which option for safe harbour is proposed to be exercised on or before the due date of furnishing of return ofincome, as specified in section 263(1)(c), for the aforesaid first tax year.
(4) After furnishing of Form No. 49, verification in respect of the following shall be done electronically:–
(a) the assessee exercising the option is an eligible assessee;
(b) the transaction in respect of which the option is exercised is an eligible international transaction; and
(c) the exercise of option is valid.
(5) After verification, the assessee shall be intimated within a period of two months from the end of the month in which the option for safe harbour isexercised, about the acceptance or the rejection of the option exercised, as the case may be.
(6) The option for exercise of safe harbour shall not be rejected unless the assessee is provided an opportunity to remove defects, if any, in the applicationfiled.
(7) Where an option for safe harbour is rejected electronically, the assessee shall be provided reasons for the same.
(8) Where an option for safe harbour is accepted, the assessee shall furnish return of income in accordance with the safe harbour provisions for each of the fiveconsecutive tax years on or before the due date specified in section 263(1)(c).
(9) The option shall not remain in force in respect of any tax year, if the assessee withdraws the option for safe harbour, by furnishing a declaration to thateffect.
(10) The withdrawal of option referred to in sub-rule (9) shall not be made after the expiry of six months from the end of the first tax year.
(11) Where the assessee withdraws the option for safe harbour by furnishing a declaration referred to in sub-rule (9) the option shall not remain in force for taxyear for which assessee has withdrawn the option and for subsequent tax years.
(12) Where an assessee withdraws the option for safe harbour, he shall not be eligible to again exercise the option for safe harbour upto the period of expiry offive consecutive tax years referred to in sub-rule (1).
(13) The assessee shall, in respect of each of the four consecutive tax years following the first tax year, furnish a statement on or before the due date offurnishing return of income of that tax year as specified in section 263(1)(c), providing details of eligible transactions, their quantum and profit margins.
(14) The Assessing Officer may make a reference under section 166 in respect of international transaction other than the eligible international transaction.
(15) Form No. 49 shall be furnished electronically either under digital signature or through electronic verification code.
(16) Form No. 49 shall be certified by the chief executive officer or chairman and managing director of the assessee and verified by the person who isauthorised to verify the return of income of the assessee under section 265.
(17) The Director General of Income-tax (Systems) shall, with the approval of the Board, lay down the data structure, standards, format and procedure offurnishing and verification of such Forms, statements, order, declaration, including any modification, if required.
Safe harbour rules for international transactions not to apply in certain cases.
92. Nothing contained in rule 86, 87, 88, 89, 90 or 91 shall apply in respect of eligible international transactions entered into with an associated enterpriselocated in any country or territory notified under section 176, or in a no tax or low tax country or territory.