Section 288 regulates the appearance by “authorized representatives” before any income-tax authority or the Appellate Tribunal. Sub-clause (viii) of the Explanation below s. 288(2), as amended by the Finance Act 2015, provides that a chartered accountant is eligible to be an “authorized representative” provided he is not “a person who, whether directly or indirectly, has business relationship with the assessee of such nature as may be prescribed”. The CBDT has now issued a Notification dated 24.06.2015 to insert Rule 51A and to define the nature of “business relationship” which is covered by sub-clause (viii) of Explanation below sub-section (2) of section 288 of the Act.
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART-II,
SECTION 3, SUB-SECTION (ii)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
(CENTRAL BOARD OF DIRECT TAXES)
New Delhi, the 24th June, 2015
S.O. 1683(E).— In exercise of the powers conferred by section 295 read with sub-clause (viii) of Explanation to sub-section (2) of section 288 of the Income-tax Act, 1961 (43 of 1961),
the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (Ninth Amendment) Rules, 2015.
(2) They shall come into force on the date of its publication in the Official Gazette.
2. In the Income-tax Rules, 1962, after rule 51, the following rule shall be inserted, namely:-
“51A. Nature of business relationship.— For the purposes of sub-clause (viii) of Explanation below sub-section (2) of section 288, the term “business relationship” shall be construed as any transaction entered into for a commercial purpose, other than, –
(i) commercial transactions which are in the nature of professional services permitted to be rendered by an auditor or audit firm under the Act and the Chartered Accountants Act, 1949 (38 of 1949) and the rules or the regulations made under those Acts;
(ii) commercial transactions which are in the ordinary course of business of the company at arm’s length price – like sale of products or services to the auditor, as customer, in the ordinary course of business, by companies engaged in the business of telecommunications, airlines, hospitals, hotels and such other similar businesses.”
[Notification No. 50/2015, F.No.142/9/2015-TPL]
(RAJESH KUMAR BHOOT)
DIRECTOR (TAX POLICY & LEGISLATION)
Note.— The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide notification No. S.O. 969(E), dated the 26th March, 1962 and last amended vide notification No. S.O. 1660(E), dated 22/06/2015.