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SECTION281OFTHEINCOMETAXACT,1961CERTAINTRANSFERSTOBEVOID
GUIDELINESFORPRIORPERMISSIONUNDERSECTION281TOCREATEACHARGEONTHE
ASSETSOFBUSINESS
CIRCULARNO.4/2011[F.NO.402/69/2010ITCC],DATED1972011

ReferenceshavebeenreceivedbytheBoardregardingissuanceofguidelinesforgrantingofpriorpermissionu/s
281oftheITAct,1961totransferorcreateachargeontheassetsoftheassessee.TheBoardhasconsideredthe
matterandinordertohaveuniformityontheissue,ithasbeendecidedthat:
1.Thetaxpayersshouldapplyintheprescribedformannexedheretotitled"Applicationu/s281oftheITAct,
1961"whichwouldbeavailableonthedepartmentalwebsite,aswellaswiththeAssessingOfficers.
2.Thetaxpayerwouldhavetofiletheformatleastthirtydayspriortotheproposeddateoftransaction.
3.Thecircumstancesunderwhichpriorpermissionu/s281shouldbegrantedbytheAssessingOfficersareas
follows:
(i)Ifthereisnodemandoutstandingandthereisnolikelihoodofdemandarisinginthenextsixmonths,then
thepermissionshouldbegranted.
(ii)Ifundisputeddemandisoutstandingandthereisnolikelihoodofdemandarisinginnext6months,thenthe
taxpayershouldpaythesamealongwithinterestduethereonandthenpermissionshouldbegranted.
(iii)Ifthereisdisputeddemandoutstanding,thenthetaxpayershouldobtainstayforthesameandindemnifythe
outstanding demand by way of bank guarantee or sufficient assets or by Department retaining the first
chargeontheassetsproposedtobetransferredoronwhichsuchchargeisbeingcreated,totheextent of
suchdemand.Thereafter,thepermissionu/s281wouldbegrantedbytheA.O.
(iv) If demand is likely to arise in the next six month, then the A.O. should explore the possibility of action
prescribedu/s281B.
4.Therewouldbeonlyonelevelofinterventioni.e.,attheleveloftherangeheadforgrantingpermission.The
casesinwhichA.O.wouldrequiresuchapprovalwouldbewhere
(a)valueofassetsbeingtransferredoronwhichchargeisbeingcreated,or
(b)theamountofchargebeingcreatedisRs.Tencroresormore.
5.Thetimelinesforgranting/refusingpermissionu/s281bytheA.O.areasfollows:
(i)Ifthereisnodemandoutstandingandthereisnolikelihoodofdemandarisinginthenextsixmonths,then
theA.O.shouldgrantthepermissionwithintenworkingdaysofthereceiptoftheapplication.
(ii)Ifundisputeddemandisoutstandingandthereisnolikelihoodofdemandarisinginnext6months,thenthe
A.O.shouldgrantpermissionwithintenworkingdaysofpaymentasinpara3(ii)above.
(iii) If there is disputed demand outstanding and the taxpayer has obtainedstayandindemnified the demand,
thentheA.O.shouldgrantthepermissionwithintenworkingdaysoftheindemnificationofthedemand.
(iv)IfdemandislikelytoariseinthenextsixmonthsandtheA.O.isconsideringactionsprescribedu/s281B
for the assets excluding the asset under consideration, then the A.O. should grant the permission within
fifteenworkingdaysofthereceiptoftheapplication.
(v) If the taxpayer does not pay the undisputed outstanding demand or his application for stay of disputed
demandisrejectedorheisunabletoindemnifytheoutstandingdemand,theapplicationshallbedisposedof
withinaperiodoftenworkingdays.Incasethepermissionisnotbeinggranted,aspeakingandreasoned
orderconveyingrefusalwouldbeissuedwiththeapprovaloftheRangeheadwithintenworkingdaysof

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expiryoftimegiventothetaxpayertopaytheundisputeddemandorrejectionofhisstayapplication,asthe
casemaybe.
ThesetimelimitsshouldbefollowedscrupulouslybytheA.Os.
6Thevalidityofthelettergrantingpermissionu/s281wouldbe:
(i)Onehundredandeightydaysfromthedateofissueofapproval,or
(ii)Serviceoforderofattachmentu/s281Bwhicheverisearlier.
7.Oncetheassetistransferredorchargeiscreated,thetaxpayershouldsubmitthedocuments,inthisregard,to
theA.O.forhisrecord.
8.Thiscircularshallcomeintoforcewithimmediateeffect.

FormI.T.N.S.281 Applicationu/s281ofITAct,1961

DATEOFAPPLICATION
To,
TheAssessingOfficer,
..
..
..

I/M/S . (name of the assesse in block letters)

son/daughterof.do,hereby,requestthatpermissionmaybegrantedunderclause(ii)of the
proviso to section 281 creating a charge on, or to part with the possession (by way of sale, mortgage, gift,
exchange or any other mode of transfer whatsoever) of asset(s) given in D4 of Part D below in favour of
person(s)tobementionedinD1ofPartDbelow.

PARTAGENERALPARTICULARS

A1FirstName A2MiddleName

A3LastName A4SEX
MaleFemale
A5DateofBirth/DateofIncorporation A6DesignationofAssessingofficer(Ward/Circle)

A7Flat/Door/BlockNo A8Nameof A9Road/Street/Post
Premises/Building/Village Office

A10Area/Locality

A11Town/City/District A12State A13Pincode
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A14EmailAddress A15Residential/OfficePhoneNo.with
STDCode

A16MobileNo.With A17FillonlyoneResidentNonResidentResidentbutnot
CountryCode ordinarilyresident

A18FillStatus(Only
one)IndividualHUFFIRMAOP/BOICompanyOthers

PARTBPOSITIONOFOUTSTANDINGDEMANDASONTHEDATEOFAPPLICATION

AssessmentYear Demand Outstanding Particularsofstay Remarks
Section Demand(InRs.) ofdemand,ifany
B1
B2
B3
B4
B5
B6
B7
B8
B9
B10

PARTCParticularsofland,building,machinery,plant,shares,securitiesandfixeddepositsinbanks,to
theextenttowhichanyoftheassetsaforesaiddoesnotformpartofthestockintradeofthebusinessof
theassesseeasonthedateofapplication

Descriptionofthe Particularsof Valueofthe Whetherany Remarks
Asset Placewhere AssetasShown ChargeExistsin [Please
Situated intheBooksof PartorFullonthe Indicatethe
Accountason Asset Amount(in
theDateof Rs.)ofCharge
Application(In ExistingOnthe
Rs.) Asset]
C1 YesNo
C2 YesNo
C3 YesNo

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C4 YesNo
C5 YesNo
C6 YesNo
C7 YesNo
C8 YesNo

PARTDTheparticularsoftheproposedtransaction(s)transferringtheassets/creatingchargeforwhich
permissionissought

D1 NameoftheParty/PartieswithWhomTransactionisProposed
D2 AddressoftheParty/PartieswithWhomTransactionisProposed
D3 PANoftheParty/PartieswithWhomTransactionisProposed
D4 TheCompleteParticularsoftheAssetsProposedtobeTransferred
orforwhichaChargeistobeCreated
D5 Expected Date of Transfer or Creation of Charge
(DD/MM/YYYY)
D6 ThePeriodForWhichChargeisbeingCreated(IfApplicable)
D7 AnyOtherInformationConsideredRelevantbytheAssessee
D8 NatureofTransactionCreationofChargeTransfer
D9 How the assessee proposes to pay or indemnify the Income Tax
Departmentforoutstandingdemanddisclosed?


D10 WhetherCreditInformationReport(CIR)fromCreditInformationBureau(India)Ltd.(CIBIL)is
available
YesNo(ifyes,attachacopy)

VERIFICATION
I, . son/daughter of
. holding permanent account number
solemnlydeclarethattothebestofmyknowledgeand
belief,theinformationgivenintheproformaaboveiscorrectandcomplete.IfurtherdeclarethatIamsubmitting
this application in my capacity as .. and I am also competenttomake thereturn of
incomeandverifythereturnofincome.

Place
SIGNHERE

APPLICATIONU/S281INSTRUCTIONS
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InstructionsforApplicationu/s281oftheITAct,1961
1.ThisformneedstobeusedbythetaxpayertoseekpermissionfromtheAssessingOfficerbeforecreatinga
charge or parting with the possession of an asset. According to section 281, no taxpayer shall make a sale or
mortgageorgiftorexchangeoranyothermodeoftransferofanyassetinfavourofanyotherperson,duringthe
pendencyofanyproceedingsorafterthecompletionofproceedings,butbeforeserviceofnoticeunderrule2of
theSecondSchedule.However,thefollowingexceptionsareprovidedintheAct:
Thetransferismadeforadequateconsiderationandwithoutanynoticeofproceedingsorpendencyoftax
ThepreviouspermissionoftheAssessingOfficerisobtained
ThetaxpayabledoesnotexceedRs.5000/andthevalueoftheassetdoesnotexceedRs.10000/
2.Assetmeansland,building,plant,machinery,shares,securitiesandfixeddepositsinbank(otherthanStock
intrade)
3. " Previous Year" is the financial year (1st April to the following 31st March) during which the income in
questionhasbeenearned."AssessmentYear"isthefinancialyearimmediatelyfollowingthepreviousyear.
4.SchemeoftheForm
Theformhasbeendividedintofourparts,thedetailsofthesameareprovidedbelow:
i.PartAseeksgeneralinformationrequiringidentificatoryandotherdata
ii.PartBseeksthepositionofoutstandingdemandasonthedateofApplication
iii.PartCseeksparticularsofassetsasonthedateofapplication
iv.PartDseekstheparticularsoftheproposedtransaction(s)transferringtheassets/creatingchargeforwhich
permissionissought
5.ItembyItemInstructions

PartA
A1A3: In case of Individual, fill your First name, Middle name and Last name in A1, A2 & A3 as per
detailsenteredinPANCard.Inanyothercase,usethespacegiveninA1A3tofillthenameoftheperson
A4:IncaseofIndividual,indicatetheDateofbirth.Inothers,indicatethedateofincorporation.Theformat
shouldalwaysbeinDDMMYYYY
A5A11:FillinthecommunicationAddress.A11PINCODEismandatorytoenablefastercommunications
from/withthedepartment
A12:Indicateyouremailaddress
A13:FilltheSTDcodeinthefirstfivedigitsandthenthetelephoneNo.inthenexteightdigits.NoSpecial
CharactersorAlphabetsareallowedinA13
A14:FilltheCountrycodeinthefirsttwodigitsandthenfillthe10digitmobilenumberinthenextten
digits.NospecialcharactersorAlphabetsareallowedinA16
A15:Shadetheappropriatecircle
A16:Shadetheappropriatecircle
A17:FillintheWard/Circle.Example:Ward15(1),Circle14(1)

PartB

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IndicatetheAssessmentYearinwhichthedemandwasraisedinColumni.Thisshouldbe of the format

201011,201112.
IndicatethesectionunderwhichDemandwasraisedinColumnii.Adetailedlistofvariousdemandsection
isgivenbelow:

Demandsunder Description
varioussections
115O Taxondistributedprofitsofdomesticcompanies
115P Interestpayablefornonpaymentoftaxbydomesticcompanies.
115R Taxondistributedincometounitholders.
115S Interestpayablefornonpaymentoftaxu/s115R
115WE(1) SummaryAssessmentFringeBenefitsTax
115WE(3) RegularAssessmentFringeBenefitTax
115WF BestjudgmentassessmentFBT
115WG Fringebenefitsescapingassessment
115WK Interestfordefaultinfurnishingreturnoffringebenefits
144 Bestjudgmentassessment
147 Incomeescapingassessment
148 Issueofnoticewhereincomehasescapedassessment
154 Rectificationofmistake
139(1) TimeLimitforfilingtheReturn
139(4) BelatedReturn
142(1) Inquirybeforeassessment
143(1) SummaryAssessment
143(3) RegularAssessment
153A Assessmentincaseofsearch
153C Assessmentofincomeofanyotherperson
158BA Assessmentofundisclosedincomeasaresultofsearch
158BFA Levyofinterestandpenaltyincertaincases.
174 AssessmentofpersonsleavingIndia
174A Assessmentofassociationofpersonsorbodyofindividualsorartificialjuridicalperson
formedforaparticulareventorpurpose
175 Assessmentofpersonslikelytotransferpropertytoavoidtax
184 Assessmentasafirm
201 Consequencesoffailuretodeductorpay
220(2) Interestincasedemandnotpaidwithin30daysfromthedateofservice
220 Interestincasedemandnotpaidwithin30daysfromthedateofservice
221 Penaltypayablewhentaxindefault

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254 OrdersofAppellateTribunal
263 RevisionofordersprejudicialtorevenuepassesbyCommissioner
264 RevisionofotherordersbyCommissioner
271 Failuretofurnishreturnscomplywithnoticesconcealmentofincome,etc.
271(1)(b) Failuretocomplywithanoticeundersubsection(2)ofsection115WDorundersub
section(2)ofsection115WEorundersubsection(1)ofsection142orsubsection(2)
of section 143 or fails to comply with a direction issued under subsection (2A) of
section142
271(1)(c) Concealmentoftheparticularsofincome,orfurnishinginaccurateparticularsthereof
271(1)(d) hasconcealedtheparticularsofthefringebenefitsorfurnishedinaccurateparticularsof
suchfringebenefits
271A Failuretokeep,maintainorretainbooksofaccount,documents,etc.
271AA Penalty for failure to keep and maintain information and document in respect of
internationaltransaction
271AAA Penaltywheresearchhasbeeninitiated
271B Failuretogetaccountsaudited
271BA Penaltyforfailuretofurnishreportundersection92E
271BB Failuretosubscribetotheeligibleissueofcapital
271C Penaltyforfailuretodeducttaxatsource
271CA Penaltyforfailuretocollecttaxatsource
271D Penaltyforfailuretocomplywiththeprovisionsofsection269SS
271E Penaltyforfailuretocomplywiththeprovisionsofsection269T
271F Penaltyforfailuretofurnishreturnofincome
271FA Penaltyforfailuretofurnishannualinformationreturn
271FB Penaltyforfailuretofurnishreturnoffringebenefits
271G Penaltyforfailuretofurnishinformationordocumentundersection92D
272A Penaltyforfailuretoanswerquestions,signstatements,furnishinformation,returnsor
statements,allowinspections,etc.
272AA Penaltyforfailuretocomplywiththeprovisionsofsection133B
272B Penaltyforfailuretocomplywiththeprovisionsofsection139A
272BB Penaltyforfailuretocomplywiththeprovisionsofsection203A
272BBB Penaltyforfailuretocomplywiththeprovisionsofsection206CA
273 Falseestimateof,orfailuretopay,advancetax
275A Contraventionofordermadeundersubsection(3)ofsection132
275B Failuretocomplywiththeprovisionsofclause(iib)ofsubsection(1)ofsection132
276 Removal,concealment,transferordeliveryofpropertytothwarttaxrecovery
276A Failuretocomplywiththeprovisionsofsubsections(1)and(3)ofsection178
276AB Failuretocomplywiththeprovisionsofsections269UC,269UEand269UL
276B FailuretopaytaxtothecreditofCentralGovernmentunderChapterXIIDorXVIIB
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276BB Failuretopaythetaxcollectedatsource
276C Wilfulattempttoevadetax,etc.
276CC Failuretofurnishreturnsofincome
276CCC Failuretofurnishreturnofincomeinsearchcases
276D Failuretoproduceaccountsanddocuments
277 Falsestatementinverification,etc.
277A Falsificationofbooksofaccountordocument,etc.
278 Abetmentoffalsereturn,etc.
278A Punishmentforsecondandsubsequentoffences
278B Offencesbycompanies
278C OffencesbyHinduundividedfamilies
IndicatethevalueoftheOutstandingDemandinColumniii
IndicatethedetailsofstayofdemandinColumniv

PartC
Indicatethetypeofassetincolumni.Thefollowingtypesofassetscanbeindicated
i.Land
ii.Building
iii.PlantandMachinery
iv.SharesandSecurities
v.FixedDepositsinBank
TheaboveassetsshouldnotformpartoftheStockinTrade
Indicatetheparticularsofplacewheretheassetissituatedincolumnii.CompleteAddresswheretheAssets
aresituatedneedstobefurnished

PartD
D1:Indicatethenameoftheparty/partieswithwhomthetransactionisproposed
D2:GivethecompleteAddressoftheparty/partieswithwhomthetransactionisproposed
D3:GivethePANoftheParty/Partieswithwhomthetransactionisproposed.IftherearemultiplePAN's,
thenindicateinthespaceaftertheboxesprovidedforwritingPAN
D4:IndicatethedetailsofalltheAssetsproposedtobetransferredorforwhichachargeistobecreated
D5:Filltheexpecteddateoftransferorcreationofcharge
D6:Ifapplicable,filltheperiodforwhichthechargeisbeingcreated
D7:Fillanyotherinformationconsideredrelevantbythetaxpayer
D8:Filltheappropriatecircle
D9 : Explain in detail, how the taxpayer proposes to pay or indemnify the Income Tax Department for
outstandingdemanddisclosed.Thetaxpayershouldsubmithislatestasset/liabilitystatementincludingthe
guaranteesgivenbyhim.

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