Form 3CEFC now available for Filing on the Income Tax E-filing Portal

The Income Tax Department has released Form 3CEFC for opting for safe harbour. This form is now available for filing on the e-filing portal.

Form 3CEFC is for opting for safe harbour for income referred to in clause (i) of sub-section (1) of section 9 chargeable to tax under the head “Profits and gains of business or profession.”

This was notified in the CBDT Notification No.124/2024 dated 29.11.2024.

The Relevant Text of Notification is Given Below:

New Rule notified by the CBDT is the Income-tax (Tenth Amendment) Rules, 2024.

In the Income-tax Rules, 1962,–

(a) in rule 10TD, in sub-rule (3B), for the words and figures “assessment years 2020-21, 2021-22, 2022-23 and 2023-24”, the words and figures “assessment years 2020-21, 2021-22, 2022-23, 2023-24 and 2024-25” shall be substituted;

(b) with effect from the date of publication of this notification in the Official Gazette,-

(i) after rule 10THD, the following rules shall be inserted, namely:–

‘DCA. — Safe Harbour Rules for income referred to in clause (i) of sub-section (1) of section 9chargeable to tax under the head “Profits and gains of business or profession”

Definitions.–– 10TI. For the purposes of this rule and rule 10TIA to rule 10TIC,—

(a) “eligible assessee” means a foreign company engaged in the business of diamond mining which has exercised an option for application of safe harbour rules in accordance with rule 10TIA;

(b) “eligible business” means a business of selling raw diamonds in any notified special zone as referred to in clause (e) of Explanation 1 to clause (i) of sub-section (1) of section 9;

(c) “gross receipts” means the aggregate of-

(i) the amount paid or payable to the eligible assessee or to any person on his behalf on account of sale of raw diamonds by such eligible assessee; and

(ii) the amount received or deemed to be received by the eligible assessee or by any person on his behalf on account of sale of raw diamonds by such eligible assessee;

(d) “relevant previous year” means the previous year relevant to the assessment year in which the option for safe harbour is exercised;

(e) “raw diamonds” means diamonds that are,–

(i) uncut or unpolished;

(ii) unassorted;

(iii) unworked or simply sawn, cleaved or bruted;

(iv) not conflict diamonds as defined by the Kimberley Process;

(v) accompanied by Kimberley Process Certificate issued by the Kimberley Process authority in the exporting country; and

(vi) falling under Tariff Heading 7102 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)

Safe Harbour.–– 10TIA. (1) The income-tax authorities shall accept the option for safe harbour exercised by an eligible assessee in any relevant previous year under rule 10TIB, where the income declared by such assessee from an eligible business is in accordance with the circumstances as specified in sub-rule (2), unless such safe harbour is declared invalid under the provisions of sub-rule (3) of rule 10TIB.

Procedure.–– 10TIB. (1) For the purposes of exercising the option for safe harbour, the assessee shall furnish Form No. 3CEFC, complete in all respects, to the Assessing Officer before furnishing the return of income under section 139 for the relevant previous year.

(2) The income from eligible business shall be determined in accordance with the provisions of the Act without having regard to the provisions of sub-rule (2) of rule 10TIA, where the assessee does not exercise option for safe harbour under sub-rule (1) of the said rule.

(3) The Assessing Officer may declare the option for safe harbour as invalid by an order in writing, where the assessee has –

(a) availed the safe harbour by furnishing incorrect facts; or

(b) concealed facts related to his business.

(4) The Assessing Officer shall afford a reasonable opportunity of being heard to the assessee before declaring the option for safe harbour invalid under sub-rule (3).

(5) The Assessing Officer shall serve a copy of the order referred to in sub-rule (3) to the assessee and the other provisions of the Act shall apply accordingly.

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