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Rule 117Published

Rule 117: Implementing APA rollback and appeal withdrawal

Rule 117 gives effect to an APA’s rollback provisions. It coordinates modified returns and additional tax with withdrawal of appeals on covered issues, and warns that failure by the applicant preventing implementation can cancel the agreement.

Official notified Income-tax Rules, 2026

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This article is for general information. Read the official Rules and applicable Act amendments, including the Taxation and Other Laws (Amendment) Act, 2026. If you need professional advice for your situation, contact Bizeneed.

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Rule 117 - Procedure for giving effect to rollback provision of an Agreement

(1) The effect to the rollback provisions of an agreement shall be given in accordance with this rule.

(2) The applicant shall furnish modified return of income referred to in section 169 in respect of a rollback year to which the agreement applies along with the proof of payment of any additional tax arising as a consequence of and computed in accordance with the rollback provision.

(3) The modified return referred to in sub-rule (2) shall be furnished along with the modified return to be furnished in respect of first of the tax years for which the agreement has been requested for in the application.

(4) If any appeal filed by the applicant is pending before the Commissioner (Appeals), Appellate Tribunal or the High Court for a rollback year, on the issue which is the subject matter of the rollback provision for that year, the said appeal to the extent of the subject covered under the agreement shall be withdrawn by the applicant before furnishing the modified return for the said year.

(5) If any appeal filed by the Assessing Officer or the Commissioner is pending before the Appellate Tribunal or the High Court for a rollback year, on an issue which is subject matter of the rollback provision for that year, the said appeal to the extent of the subject covered under the agreement shall be withdrawn by the Assessing Officer or the Commissioner, as the case may be, within three months of filing of modified return by the applicant.

(6) The applicant, the Assessing Officer or the Commissioner, shall inform the Dispute Resolution Panel, or the Commissioner (Appeals), or the Appellate Tribunal, or the High Court, as the case may be, the fact of an agreement containing rollback provision having been entered into along with a copy of the same as soon as it is practicable to do so.

(7) In case effect cannot be given to the rollback provision of an agreement in accordance with this rule, for any rollback year to which it applies, on account of failure on the part of applicant, the agreement shall be cancelled.

Rule breakdown

Furnish the rollback modified return and payment proof

For a covered rollback year, furnish the modified return referred to in section 169 with proof of additional tax arising from and computed under the rollback provision.

The rollback return is furnished along with the modified return for the first tax year requested in the application. Check section 169’s applicable timetable as well as this coordination requirement.

Withdraw the applicant’s covered appeal before filing

If the applicant’s appeal is pending before the Commissioner (Appeals), Tribunal or High Court for the rollback year on the covered issue, withdraw it to the extent of the agreement’s subject matter before furnishing the modified return.

Identify the covered part precisely. The rule does not say that every unrelated issue in the same appeal must be abandoned.

Departmental appeal withdrawal has its own clock

For the specified AO or Commissioner appeals pending before the Tribunal or High Court, the covered part is withdrawn within three months of the applicant filing the modified return.

Record the return filing date and the scope of the covered issue to support follow-up with the relevant authority.

Notify the forum of the agreement

The applicant, AO or Commissioner, as applicable, informs the relevant DRP, Commissioner (Appeals), Tribunal or High Court as soon as practicable and provides a copy of the agreement.

Keep copies of the agreement, notices, withdrawals and acknowledgments together in the implementation file.

Failure to implement can cancel the agreement

If effect cannot be given for a covered rollback year because of failure by the applicant, sub-rule (7) requires cancellation of the agreement.

Treat implementation as a tracked project after signing, with each return, payment, appeal and notification assigned to an owner.

Key takeaways

Modified return plus tax proof

Implementation requires the specified filings and payment evidence.

Covered issues only

Apply the appeal-withdrawal requirement to the agreement’s subject.

Different withdrawal timing

Applicant and departmental appeals have distinct deadlines.

Implementation failure matters

The stated applicant failure can cancel the agreement.

Practical checklist

  • Map each rollback year and covered issue.
  • Coordinate modified returns, tax proof and appeal withdrawals.
  • Notify the relevant forum promptly with the agreement.

Avoid

  • Do not assume signing alone completes rollback.
  • Do not ignore the cancellation consequence of applicant implementation failure.

FAQs

When must the applicant withdraw the covered appeal?

Before furnishing the modified return for the rollback year, in the circumstances stated by sub-rule (4).

How long does the specified departmental appeal withdrawal allow?

Three months from filing the modified return by the applicant.

Does the rule require withdrawal of unrelated appeal issues?

It specifies withdrawal to the extent of the subject covered under the agreement.

Glossary

Modified return
The section 169 return used to give effect to the relevant agreement and rollback terms.

Official sources