The Board says my advance pricing agreement was obtained by misrepresentation. What can it actually do, and what happens to the years the agreement covered?
Section 92CC(7) allows the Board, with the approval of the Central Government, to declare an advance pricing agreement void ab initio by an order, on one ground and one ground only — that the agreement was obtained by the person by fraud or misrepresentation of facts. Section 92CC(8) then applies the Act to him as if the agreement had never been entered into, and takes the whole stretch between the date of the agreement and the date of the s.92CC(7) order out of every period of limitation in the Act, with a proviso lifting whatever is left to sixty days. Rule 10R(6) requires the order declaring the agreement void to be in writing and to give reasons, including reasons for not accepting the assessee's submissions.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2012-07-01, reported as Section 92CC inserted by s.40 of the Finance Act 2012 with effect from 1 July 2012. It bears on section 92CC, section 92CC(6), section 92CC(7), section 92CC(8), section 92CC(9), section 92CD, section Rule 10R, section Rule 10R(6), section Rule 10P, section Rule 10Q of the Income Tax Act 1961, in Assessment & Scrutiny, How Tax Law Is Read and Reassessment & Reopening matters.
This is the only route by which a signed APA is undone from the beginning rather than prospectively, and the limitation exclusion in s.92CC(8)(b) can bring back years that would otherwise have closed long ago. The argument against a s.92CC(7) proposal is made on the narrow statutory ground and on the reasons requirement in Rule 10R(6), not on the merits of the transfer price. Note also that the provision has been on the statute book since 1 July 2012 and no decided case applying it could be found, so there is no judicial gloss to work with — the text is all there is.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Section 92CC was inserted by s.40 of the Finance Act 2012 with effect from 1 July 2012. Sub-section (7), as the department prints it, reads: "The Board may, with the approval of the Central Government, by an order, declare an agreement to be void ab initio, if it finds that the agreement has been obtained by the person by fraud or misrepresentation of facts." Sub-section (8) provides that upon declaring the agreement void ab initio — (a) all the provisions of the Act shall apply to the person as if such agreement had never been entered into; and (b) notwithstanding anything contained in the Act, for the purpose of computing any period of limitation under this Act, the period beginning with the date of such agreement and ending on the date of order under sub-section (7) shall be excluded. The proviso to clause (b) reads: "Provided that where immediately after the exclusion of the aforesaid period, the period of limitation, referred to in any provision of this Act, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly." Sub-section (9) is the rule-making power: the Board may prescribe a scheme specifying the manner, form, procedure and any other matter generally in respect of the advance pricing agreement. The scheme so prescribed is rules 10F to 10T and rule 44GA, with Forms 3CEC to 3CEF, and for rollback rules 10MA and 10RA with Form 3CEDA — the department's own footnote to s.92CC says so.
The statutory position is as follows. The ground is exhaustive: fraud or misrepresentation of facts in the obtaining of the agreement, and nothing else. The power is the Board's, exercisable only with the approval of the Central Government, and only by an order. The consequence in s.92CC(8)(a) is total — the Act applies as if the agreement had never been entered into, so the covered years fall to be dealt with on ordinary transfer pricing principles. The consequence in s.92CC(8)(b) is a limitation exclusion that operates notwithstanding anything else in the Act, running from the date of the agreement to the date of the s.92CC(7) order, with a sixty-day floor for whatever period is left. Rule 10R(6) supplies the procedural control: the order declaring an agreement void ab initio for fraud or misrepresentation of facts must be in writing and must give the reason for the declaration and for non-acceptance of the assessee's submissions, if any.
Read against the rest of s.92CC the design is clear enough. Sub-section (5) makes a concluded agreement binding both on the assessee and on the Principal Commissioner or Commissioner and his subordinates; sub-section (6) removes that binding force prospectively where there is a change in law or facts having a bearing on the agreement; Rule 10Q allows the agreement to be revised and Rule 10R allows it to be cancelled, in both cases going forward. Sub-section (7) is the only provision that reaches backwards, and it is confined to a vitiating factor at the moment the agreement was obtained. The limitation exclusion in sub-section (8)(b) exists because the years covered by the agreement will normally have gone by while the agreement was on foot and unassailable; without the exclusion the declaration would often be an empty exercise. Rule 10R(1) lists the cancellation grounds — an adverse finding in the Rule 10P compliance audit, failure to file the annual compliance report in time, material errors in that report, and cancellation consequent on Rule 10Q(4) or Rule 10RA(7) — and none of those is fraud; the void ab initio order under s.92CC(7) is dealt with separately, in Rule 10R(6).
all the provisions of the Act shall apply to the person as if such agreement had never been entered into
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Handle my notice → Ask a CA on WhatsAppSection 92CC(7) allows the Board, with the approval of the Central Government, to declare an advance pricing agreement void ab initio by an order, on one ground and one ground only — that the agreement was obtained by the person by fraud or misrepresentation of facts. Section 92CC(8) then applies the Act to him as if the agreement had never been entered into, and takes the whole stretch between the date of the agreement and the date of the s.92CC(7) order out of every period of limitation in the Act, with a proviso lifting whatever is left to sixty days. Rule 10R(6) requires the order declaring the agreement void to be in writing and to give reasons, including reasons for not accepting the assessee's submissions. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 92CC, section 92CC(6), section 92CC(7), section 92CC(8), section 92CC(9), section 92CD, section Rule 10R, section Rule 10R(6), section Rule 10P, section Rule 10Q of the Income Tax Act 1961. It is reported as Section 92CC inserted by s.40 of the Finance Act 2012 with effect from 1 July 2012. This is the only route by which a signed APA is undone from the beginning rather than prospectively, and the limitation exclusion in s.92CC(8)(b) can bring back years that would otherwise have closed long ago. The argument against a s.92CC(7) proposal is made on the narrow statutory ground and on the reasons requirement in Rule 10R(6), not on the merits of the transfer price. Note also that the provision has been on the statute book since 1 July 2012 and no decided case applying it could be found, so there is no judicial gloss to work with — the text is all there is. If it applies to you, the first step is this: Check that what is alleged is fraud or misrepresentation of facts in the obtaining of the agreement. A later change in facts or in law is dealt with by s.92CC(6), which makes the agreement non-binding, and by revision under Rule 10Q — not by s.92CC(7).
Section 92CC was inserted by s.40 of the Finance Act 2012 with effect from 1 July 2012. Sub-section (7), as the department prints it, reads: "The Board may, with the approval of the Central Government, by an order, declare an agreement to be void ab initio, if it finds that the agreement has been obtained by the person by fraud or misrepresentation of facts." Sub-section (8) provides that upon declaring the agreement void ab initio — (a) all the provisions of the Act shall apply to the person as if such agreement had never been entered into; and (b) notwithstanding anything contained in the Act, for the purpose of computing any period of limitation under this Act, the period beginning with the date of such agreement and ending on the date of order under sub-section (7) shall be excluded. The proviso to clause (b) reads: "Provided that where immediately after the exclusion of the aforesaid period, the period of limitation, referred to in any provision of this Act, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly." Sub-section (9) is the rule-making power: the Board may prescribe a scheme specifying the manner, form, procedure and any other matter generally in respect of the advance pricing agreement. The scheme so prescribed is rules 10F to 10T and rule 44GA, with Forms 3CEC to 3CEF, and for rollback rules 10MA and 10RA with Form 3CEDA — the department's own footnote to s.92CC says so. The matter was decided on 2012-07-01 by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. The statutory position is as follows. The ground is exhaustive: fraud or misrepresentation of facts in the obtaining of the agreement, and nothing else. The power is the Board's, exercisable only with the approval of the Central Government, and only by an order. The consequence in s.92CC(8)(a) is total — the Act applies as if the agreement had never been entered into, so the covered years fall to be dealt with on ordinary transfer pricing principles. The consequence in s.92CC(8)(b) is a limitation exclusion that operates notwithstanding anything else in the Act, running from the date of the agreement to the date of the s.92CC(7) order, with a sixty-day floor for whatever period is left. Rule 10R(6) supplies the procedural control: the order declaring an agreement void ab initio for fraud or misrepresentation of facts must be in writing and must give the reason for the declaration and for non-acceptance of the assessee's submissions, if any.
Read against the rest of s.92CC the design is clear enough. Sub-section (5) makes a concluded agreement binding both on the assessee and on the Principal Commissioner or Commissioner and his subordinates; sub-section (6) removes that binding force prospectively where there is a change in law or facts having a bearing on the agreement; Rule 10Q allows the agreement to be revised and Rule 10R allows it to be cancelled, in both cases going forward. Sub-section (7) is the only provision that reaches backwards, and it is confined to a vitiating factor at the moment the agreement was obtained. The limitation exclusion in sub-section (8)(b) exists because the years covered by the agreement will normally have gone by while the agreement was on foot and unassailable; without the exclusion the declaration would often be an empty exercise. Rule 10R(1) lists the cancellation grounds — an adverse finding in the Rule 10P compliance audit, failure to file the annual compliance report in time, material errors in that report, and cancellation consequent on Rule 10Q(4) or Rule 10RA(7) — and none of those is fraud; the void ab initio order under s.92CC(7) is dealt with separately, in Rule 10R(6). In the words reproduced by the source cited on this page: "all the provisions of the Act shall apply to the person as if such agreement had never been entered into"
It was decided by the CBDT Circulars & Instructions on 2012-07-01 and is reported as Section 92CC inserted by s.40 of the Finance Act 2012 with effect from 1 July 2012. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 92CC, section 92CC(6), section 92CC(7), section 92CC(8), section 92CC(9), section 92CD, section Rule 10R, section Rule 10R(6), section Rule 10P, section Rule 10Q, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The statutory position is as follows. The ground is exhaustive: fraud or misrepresentation of facts in the obtaining of the agreement, and nothing else. The power is the Board's, exercisable only with the approval of the Central Government, and only by an order. The consequence in s.92CC(8)(a) is total — the Act applies as if the agreement had never been entered into, so the covered years fall to be dealt with on ordinary transfer pricing principles. The consequence in s.92CC(8)(b) is a limitation exclusion that operates notwithstanding anything else in the Act, running from the date of the agreement to the date of the s.92CC(7) order, with a sixty-day floor for whatever period is left. Rule 10R(6) supplies the procedural control: the order declaring an agreement void ab initio for fraud or misrepresentation of facts must be in writing and must give the reason for the declaration and for non-acceptance of the assessee's submissions, if any. It arises in Assessment & Scrutiny, How Tax Law Is Read and Reassessment & Reopening matters, on section 92CC, section 92CC(6), section 92CC(7), section 92CC(8), section 92CC(9), section 92CD, section Rule 10R, section Rule 10R(6), section Rule 10P, section Rule 10Q of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Ask to be shown the approval of the Central Government. Section 92CC(7) conditions the Board's power on it, and it is not the Board's approval to give itself. Insist on the Rule 10R(2) hearing before any order, and on a written order under Rule 10R(6) giving reasons for the declaration and for rejecting your submissions. Do the limitation arithmetic under s.92CC(8)(b): the period from the date of the agreement to the date of the s.92CC(7) order drops out of every period of limitation in the Act, and the proviso extends whatever remains to sixty days where it is less than that. Recompute the covered years on ordinary principles, because s.92CC(8)(a) applies the Act as if the agreement had never existed, and work out what that does to any modified return already filed under s.92CD.
Still good law. The text set out here is the text the department currently publishes on its section 92CC page, which carries a 2025 year stamp; the same section read on the department's 2023 and 2021 editions carries a footnote recording substitution of the clauses dealing with income referred to in s.9(1)(i) by Act No. 12 of 2020 with effect from 1 April 2020, and a footnote directing the reader to rules 10F to 10T, rule 44GA and Forms 3CEC to 3CEF. Nothing on the department's pages shows sub-sections (7), (8) or (9) as amended, omitted or substituted since the Finance Act 2012 inserted them, save for the sixty-day proviso and the corrected cross-reference noted in the editor's note. The corresponding provision of the Income-tax Act 2025, which the department publishes as s.168, carries the same void ab initio power in sub-sections (7) onwards. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Two things about the text are worth recording. First, as s.40 of the Finance Act 2012 enacted it, s.92CC(8)(b) excluded the period ending "on the date of order under sub-section (1)" — a cross-reference that cannot have been meant, since sub-section (1) is the power to enter into the agreement. The department's current text reads "sub-section (7)". Second, the sixty-day proviso to clause (b) is not in the 2012 text and appears only in the current text; the department's section page does not print a footnote identifying the Act that inserted it, so no attribution is made here. No decided case applying s.92CC(7), (8) or (9) could be found. indiankanoon was searched on 16 September 2026 for "void ab initio" with "92CC" and "advance pricing"; for "fraud or misrepresentation of facts" with "advance pricing agreement"; for "92CC(7)" or "92CC(8)"; and for the phrase "declare an agreement to be void". The only tax decisions returned were ones already in this library on other points — the Telangana High Court in Deloitte Consulting India and the Bombay High Court in Gemological Institute of America — together with rollback and method cases in which s.92CC is merely set out. None of them concerns a declaration under s.92CC(7). An earlier round of searching in a separate pass produced the same result. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The statutory position is as follows. The ground is exhaustive: fraud or misrepresentation of facts in the obtaining of the agreement, and nothing else. The power is the Board's, exercisable only with the approval of the Central Government, and only by an order. The consequence in s.92CC(8)(a) is total — the Act applies as if the agreement had never been entered into, so the covered years fall to be dealt with on ordinary transfer pricing principles. The consequence in s.92CC(8)(b) is a limitation exclusion that operates notwithstanding anything else in the Act, running from the date of the agreement to the date of the s.92CC(7) order, with a sixty-day floor for whatever period is left. Rule 10R(6) supplies the procedural control: the order declaring an agreement void ab initio for fraud or misrepresentation of facts must be in writing and must give the reason for the declaration and for non-acceptance of the assessee's submissions, if any.
TaxSphere, “s.92CC(7) to (9) — APA declared void ab initio”, https://taxnotice.vittsphere.com/caselaw/case/statutory-position-92cc-7-to-9-apa-declared-void-ab-initio-for-fraud-and-the-limitation-that-comes-back/ (validity last checked 2026-09-16)
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The Board wants to revise, or to cancel, my advance pricing agreement. On what grounds can it, and what am I entitled to before it does?
Your client offered a transfer pricing adjustment itself because its APA required it. The officer says s.92C(4) bars the s.10AA exemption on that extra income. Is he right?
Your APA year has been reopened and the officer has himself re-examined whether you complied with the APA. Can he do that without a compliance audit by the Transfer Pricing Officer?
Do I have to go through a pre-filing consultation before I file Form 3CED, and what happens if the application is defective or goes in late?
