Rule 112 — Amendments to application.
Sub-rule (1) gives the applicant a right to ask: an applicant may request in writing for an amendment to an application at any stage, before the finalisation of the terms of the agreement.
Sub-rule (2) leaves the decision with the authority and fixes the limit on it. The Principal Chief Commissioner of Income-tax (International Taxation), for a unilateral agreement, or the competent authority of India, for a bilateral or multilateral agreement, may allow the amendment if it does not have the effect of altering the nature of the application as originally filed.
An advance pricing agreement is negotiated over a long period, and the facts an applicant put forward at the start may need correction as the process runs. Without a stated route, a change would mean withdrawing and starting again. Rule 112 provides the route, but bounds it: the discretion to allow an amendment stops where the amendment would change the nature of the application as originally filed, so an applicant cannot use it to obtain a different agreement from the one applied for.
Two limits do the work. The first is timing: the request must come before the finalisation of the terms of the agreement, so once terms are settled the route is closed. The second is subject matter: the amendment must not alter the nature of the application as originally filed, which is a narrower test than materiality — a correction of facts or figures sits inside it, a change to what is being applied for does not. The rule says the authority "may" allow the amendment, so even a request within both limits is not granted as of right, and which authority decides depends on whether the application is unilateral or bilateral or multilateral.
A company with a pending unilateral advance pricing agreement application finds that the transactions covered were described with an error in the transfer pricing method attributed to one of them. It requests an amendment in writing before the terms are finalised. The Principal Chief Commissioner of Income-tax (International Taxation) may allow it if the correction does not alter the nature of the application as originally filed. A request instead to bring in a wholly different class of transaction would not clear that test.
You meet it during the advance pricing agreement process, as the written amendment request an applicant files with the authority handling its application and the response allowing or refusing it.
An applicant may request in writing for an amendment to an application at any stage, before the finalisation of the terms of the agreement.
if such an amendment does not have effect of altering the nature of the application as originally filed