Income Tax Act 1947 · 2020 Revised Edition · Part 7 · Ascertainment of Certain Income
34E. Surcharge on transfer pricing adjustments
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Where the Comptroller, in relation to the year of assessment 2019 or any subsequent year of assessment —
Comptroller
“Comptroller” means the Comptroller of Income Tax appointed under section 3(1) and includes, for all purposes of this Act except the exercise of the powers conferred upon the Comptroller by sections 34F(9), 37L(7), 37M(5), 67(1)(a), 95, 96, 96A and 101, a Deputy Comptroller or an Assistant Comptroller so appointed;
increases the amount of the income of a person under section 34D(1A)(a);
reduces the amount of any deduction allowed to a person under section 34D(1A)(b); or
reduces the amount of any loss of a person under section 34D(1A)(c),a surcharge equal to 5% of the amount of the increase or reduction (as the case may be) is recoverable by the Comptroller from the person as a debt due to the Government.
Despite any objection to or an appeal lodged against an assessment made pursuant to any adjustment under section 34D(1A), the surcharge must be paid —
within one month after the date a written notice of the surcharge is served in accordance with section 8(1) on the person imposed with the surcharge; and
in the manner stated in the written notice.
The Comptroller may, in the Comptroller’s discretion, and subject to such terms and conditions (including the imposition of interest) as the Comptroller may impose, extend the time within which payment is to be made.
Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 apply to the collection and recovery of a surcharge and any interest imposed under subsection (3), as they apply to the collection and recovery of tax.
The Comptroller may, for any good cause, remit wholly or in part any surcharge payable under this section.
If, upon an objection under section 76 or an appeal under Part 18, an assessment made pursuant to an adjustment under section 34D(1A) is varied or annulled, then the surcharge is correspondingly increased, reduced or annulled (as the case may be), and —
if the surcharge is increased, subsections (1) to (5) apply to the increased amount of the surcharge as they apply to the surcharge; or
if the surcharge is reduced or annulled and it has already been paid to the Comptroller, the amount of the reduction or the entire amount (including any interest paid on the amount) must be refunded.