The Central Board of Direct Taxes (CBDT) has released an important Office Memorandum dated 27 October 2025, simplifying the process for taxpayers seeking to withdraw appeals pending before the Commissioner of Income Tax (Appeals) [CIT(A)] after a Mutual Agreement Procedure (MAP) resolution is reached. The move aims to streamline compliance and reduce procedural bottlenecks for multinational taxpayers undergoing MAP proceedings.
According to the memorandum issued by the Foreign Tax & Tax Research Division - APA-I Section, CBDT noted that in several MAP cases filed under Rule 44G of the Income Tax Rules, 1962, taxpayers face difficulty in providing the required proof of appeal withdrawal when the appeal is still pending at the CIT(A) level. This proof is mandatory for the Competent Authority (CA) in India to give effect to a successfully negotiated MAP settlement.
Key Highlights of the CBDT's New Procedure
1. Lack of Clear Instructions Led to Procedural Gaps
CBDT observed that no explicit procedure existed for CIT(A) to acknowledge withdrawal requests when taxpayers sought to withdraw appeals on grounds resolved under MAP. This gap often delayed the implementation of MAP resolutions.
2. CIT(A) Must Now Issue Intimation of Appeal Withdrawal
The memorandum directs that whenever a taxpayer files a withdrawal request for grounds covered under MAP resolution, the CIT(A) must issue an intimation accepting the withdrawal. This intimation must be sent to the taxpayer in all such cases.
3. Intimation to Serve as Official Proof of Withdrawal
The CIT(A)'s intimation will now be considered valid proof of withdrawal for the purpose of complying with Rule 44G(8). The Competent Authority will use this intimation to formally give effect to the MAP agreement.
4. Instruction Issued with High-Level Approval
The directive has been issued with the approval of Member (Legislation), CBDT, and has been circulated to all senior officials including the Chairperson of CBDT, Joint Secretary (FT&TR), and all CIT(A) offices nationwide.
Why This Matters
The MAP process often involves lengthy negotiations between India and treaty partners to resolve transfer pricing or double taxation disputes. The newly introduced step will:
- Reduce delays in implementing MAP outcomes
- Provide clarity to taxpayers and CIT(A) offices
- Support ease of doing business for multinational companies
- Strengthen India's dispute resolution framework
By standardising the withdrawal acknowledgement process, CBDT has addressed a long-standing compliance hurdle faced by MAP applicants.
Official copy of the Memorandum has been attached
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