Rule 129: GAAR notice and reference Forms 62–64
Rule 129 sets the notice and form requirements for the section 274 GAAR reference process. It requires the proposed arrangement, tax benefit, reasoning and relied-on evidence to be identified before the assessee responds.
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Rule 129 - Notice and Forms for reference under section 274
(1) For the purposes of section 274(1), before making a reference to the Commissioner, the Assessing Officer shall issue a notice to the assessee seeking objections, if any, as to the applicability of provisions of Chapter XI in his case.
(2) The notice referred to in sub-rule (1) shall contain the following: — (a) details of the arrangement to which the provisions of Chapter XI are proposed to be applied; (b) the tax benefit arising under the arrangement; (c) the basis and reason for considering that the main purpose of the identified arrangement is to obtain tax benefit; (d) the basis and the reasons why the arrangement satisfies the conditions in section 179(1)(a) to (d); and (e) the list of documents and evidence relied upon in respect of clauses (c) and (d).
(3) The reference by the Assessing Officer to the Commissioner under section 274(1) shall be in Form No. 62.
(4) Where the Commissioner is satisfied that the provisions of Chapter XI are not required to be invoked with reference to an arrangement, he shall record his satisfaction regarding the applicability of the provisions of Chapter XI in Form No. 63 and issue directions to the Assessing Officer in Form No. 63, after considering __ (a) the reference received from the Assessing Officer under section 274(1); or (b) the reply of the assessee in response to the notice issued under section 274(2).
(5) The Commissioner, before making a reference to the Approving Panel under section 274(4), shall, — (a) record his satisfaction regarding the applicability of the provisions of Chapter XI in Form No. 64; and (b) seek specific factual report in writing from the International Financial Service Centre Authority, where the assessee is an entity located in an International Financial Service Centre.
(6) The Commissioner or Principal Commissioner shall make a reference under section 274(4) to an Approving panel in Form No. 64 with such other documents as deemed fit, with all being submitted in four sets, either in Hindi or English.
Rule breakdown
The AO must first seek objections
Before making a section 274(1) reference to the Commissioner, the AO issues a notice seeking objections to Chapter XI’s applicability.
Read the proposed arrangement and allegations carefully and organise the factual and legal response against the actual notice.
Check all required notice contents
The notice states the arrangement, resulting tax benefit, reasons why obtaining that benefit is considered the main purpose, the basis for the section 179(1)(a)–(d) conditions and the documents or evidence relied on.
A response should address these identified grounds and supporting material rather than only asserting that the transaction had a business purpose.
Forms identify the procedural decision
The AO reference uses Form 62. If the Commissioner is satisfied Chapter XI need not be invoked after the stated reference or response consideration, the satisfaction and directions are recorded in Form 63.
Before a panel reference, the satisfaction is recorded in Form 64. Distinguish these forms and stages when reviewing correspondence.
IFSC cases require the specified factual report
Before referring an IFSC-located entity’s case to the Approving Panel, the Commissioner seeks a specific written factual report from the International Financial Service Centre Authority as stated in the rule.
Identify the entity’s status and relevant facts. The report requirement does not by itself decide whether GAAR applies.
Panel reference package
The Commissioner or Principal Commissioner submits the section 274(4) reference in Form 64 with appropriate documents, all in four sets, in Hindi or English.
Keep the record complete and read the separate time limits and hearing procedure in the following rules.
Key takeaways
Notice before AO reference
The assessee must be invited to object.
Reasons and evidence identified
The notice must contain the specified elements.
Different forms, different stages
Forms 62, 63 and 64 have distinct roles.
Practical checklist
- Address each notice ground and relied-on document.
- Track the exact procedural stage and form.
- Retain supporting business and transaction evidence.
Avoid
- Do not treat all three reference forms as interchangeable.
- Do not assume the IFSC report itself settles applicability.
FAQs
Can the AO refer without first issuing the notice described here?
Sub-rule (1) requires the notice before making the section 274(1) reference.
Which form records directions not to invoke Chapter XI in the stated cases?
Form 63.
What additional step applies before the panel reference for an IFSC entity?
The specified written factual report must be sought from the IFSC Authority.
Glossary
- Form 64
- The form for recording the stated satisfaction and making the Approving Panel reference.