Clause 154 - Determination of an impermissible avoidance agreement and consequences thereof. - Direct Taxes Code, 2010

Determination of an impermissible avoidance agreement and consequences thereof. 154. (1) The Commissioner shall, for the purposes of section 123, serve on the assessee a notice requiring him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars on which the assessee may rely in support of his claim that the provisions of section 123 are not applicable to him. (2) After hearing the evidence and after taking into account such particulars as the assessee may produce, the Commissioner shall pass an order declaring an arrangement as being an impermissible avoidance agreement or otherwise for the purposes of section 123. (3) Upon declaring an arrangement as an impermissible avoidance agreement, the Commissioner shall— (a) issue directions to the Assessing Officer to make such adjustment to the total income, or the tax liability, of the assessee; and (b) forward or cause to be forwarded a copy of such order— (i) to the assessee; and (ii) to the jurisdictional Commissioner of the other party to the arrangement, who shall then proceed under this section against such other party and the provisions of this section shall apply accordingly. (4) No order under sub-section (2) shall be issued after a period of twelve months from the end of the month in which the notice under sub-section (1) is issued.