Rule 113 — Furnishing of annual compliance report. Made under s.168 of the Income-tax Act, 2025.
Rule 113 gives effect to Section 168 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
The rule requires annual reporting on a live advance pricing agreement. Sub-rule (1) requires the assessee to furnish an annual compliance report to the Principal Chief Commissioner of Income-tax (International Taxation) for each year covered in the agreement. Sub-rule (2) prescribes Form No. 52 for that report. Sub-rule (3) fixes the time: the report for each year covered in the agreement must be filed within thirty days of the due date of filing the income-tax return for that year, or within ninety days of entering into an agreement, whichever is later, and sent to the Principal Chief Commissioner of Income-tax (International Taxation).
Sub-rule (4) deals with distribution. The Principal Chief Commissioner of Income-tax (International Taxation) sends one copy of the annual compliance report to the competent authority of India, one copy to the Commissioner of Income-tax having jurisdiction over the income-tax assessment of the assessee, and one copy to the Transfer Pricing Officer having jurisdiction over the assessee.
An advance pricing agreement fixes a method in advance, but nothing in the agreement tells the Department whether the assessee actually applied it in a given year or whether the critical assumptions still hold. The annual compliance report is the instrument that closes that gap, year by year, for every year the agreement covers. Sub-rule (4) then puts the report in front of the three offices that need it — the competent authority, the assessing side and the transfer pricing side — without the assessee having to file three times.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Time limit for filing the annual compliance report, first branch | Within thirty days of the due date of filing the income-tax return for that year | Applies unless the second branch gives a later date | Sub-rule (3) |
| Time limit for filing the annual compliance report, second branch | Within ninety days of entering into an agreement | Applies where it falls later than thirty days from the return due date; the rule takes whichever of the two is later | Sub-rule (3) |
| Number of copies circulated by the receiving authority | Three — one each to the competent authority of India, the jurisdictional Commissioner and the jurisdictional Transfer Pricing Officer | On receipt of the annual compliance report | Sub-rule (4) |
The whichever-is-later test in sub-rule (3) is what makes the rule workable for past years. An agreement is often entered into after the returns for the earlier covered years have already been filed; for those years the thirty-day branch has long expired, and the ninety days from entering into the agreement is the operative date, so a run of reports falls due together shortly after signing. For later years in the covered period the thirty-day branch governs, and it runs from the due date of filing the return, not from the date the return was actually filed. A report is due for each year covered in the agreement, so the obligation is one per covered year rather than one per agreement. The assessee files with one office only; the circulation to the competent authority, the Commissioner and the Transfer Pricing Officer is the receiving authority's job under sub-rule (4).
A company enters into an advance pricing agreement covering five tax years, three of which have already gone by and for which returns were filed long ago. Reports in Form No. 52 for those three years are due within ninety days of entering into the agreement, that branch being the later one. For the fourth covered year the return due date arrives afterwards, so the report for that year is due within thirty days of that due date. The company sends all of them to the Principal Chief Commissioner of Income-tax (International Taxation), who circulates copies to the competent authority of India, the jurisdictional Commissioner and the Transfer Pricing Officer.
You meet it every year an advance pricing agreement is in force, in the Form No. 52 filing that follows the return, and again in the Transfer Pricing Officer's file when the year's compliance with the agreed method is examined.
The assessee shall furnish an annual compliance report to the Principal Chief Commissioner of Income-tax (International Taxation) for each year covered in the agreement.
within thirty days of the due date of filing the income-tax return for that year, or within ninety days of entering into an agreement, whichever is later