Section 92CA(1)

Section 92CA(1) — the law in short

What the courts have decided on section 92CA(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• PCIT v S.G. Asia Holdings (India) Pvt Ltd Supreme CourtCuts both ways
  The Assessing Officer worked out the arm's length price himself and added to my income without ever sending the transaction to the Transfer Pricing Officer. Is that adjustment good?
  No, but it does not follow that you keep the money. The Supreme Court held that the Assessing Officer breached the Board's mandatory instructions by not making the reference, so the adjustment could not stand as made. It then refused the Tribunal's remedy of simply deleting the adjustment, and restored the matter to the Assessing Officer so that the reference could be made and the Transfer Pricing Officer could do the work. The defect is one of procedure and the Court cured it by sending the file back.
• Benteler Automotive India Pvt Ltd v Union of India High CourtHelps taxpayerNo later treatment found
  The DRP issued its directions years ago and the Assessing Officer has still not passed a final assessment order. Is the assessment now dead, or can he pass one whenever he likes?
  It is dead. Section 144C(13) requires the Assessing Officer, on receipt of the DRP's directions under s.144C(5), to complete the assessment in conformity with them within one month from the end of the month in which the directions are received, and he need not give any further hearing. Where that month passed — here even after the extension of the outer date under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 — and no order was passed, the Bombay High Court held the assessment barred by limitation and quashed the pending proceedings on the assessee's writ petition.
• Times Global Broadcasting Company Ltd v Union of India High CourtHelps taxpayerSuperseded by amendment
  The TPO has adjusted a domestic transaction that the Assessing Officer never referred to him and that I never reported in Form 3CEB. Did he have jurisdiction?
  On the law as it stood, no. The Bombay High Court held that s.92CA(2A) and s.92CA(2B), which let the TPO take up a transaction not referred to him and a transaction not reported under s.92E, spoke only of international transactions; specified domestic transactions were conspicuously absent. For a specified domestic transaction the TPO could therefore study only what the Assessing Officer had referred, and the adjustment of Rs 57.54 crores on the demerger creditors was quashed. CAUTION: that gap has since been closed. Both sub-sections were amended by Act No. 15 of 2024 with effect from 1 April 2025 to cover specified domestic transactions as well.
• Indorama Synthetics (India) Ltd v Additional CIT High CourtHelps taxpayerHigh Courts differ
  The Assessing Officer referred my case to the TPO in a one-paragraph letter without dealing with my objection that there was no international transaction at all. Can I attack the reference itself?
  Yes. The Delhi High Court held that the Assessing Officer's satisfaction, even prima facie, that there IS an international transaction or specified domestic transaction is a sine qua non for a reference under s.92CA(1); where the assessee raises a threshold objection to jurisdiction, the officer must deal with it and must give a hearing before recording his satisfaction. The three references were set aside and the officer directed to decide afresh after hearing the assessee. The Court concurred with the Bombay High Court in Vodafone India Services and declined to follow the contrary Gujarat decision in Veer Gems, noting that CBDT Instruction No. 3 of 2016 has itself adopted the Bombay position.
• Shell India Markets P Ltd v ACIT High CourtHelps taxpayerNo later treatment found
  The TPO says we issued shares to our parent too cheaply. Can he tax the shortfall?
  No. The issue of equity to a non-resident parent is on capital account and gives rise to no income, and Chapter X is machinery for computing income at arm's length, not a charge. With no income there is nothing for the transfer pricing machinery to work on, and re-characterising the alleged shortfall as an interest-bearing loan has no statutory foundation.
• VVF (India) Limited v NFAC — the secondary adjustment on a corporate guarantee deleted in the same order that sent the guarantee fee itself back to the TPO, and Rule 10CB's interest clock identified as running from the s.139(1) due date ITATHelps taxpayerNo later treatment found
  The TPO has fixed a guarantee commission rate I dispute AND imputed interest on the delay as a secondary adjustment. Can the secondary adjustment stand while the underlying rate is still being fought over?
  The ITAT Mumbai deleted it. On 14 February 2025, for assessment year 2020-21, the Tribunal remitted the corporate guarantee adjustment itself to the Assessing Officer and Transfer Pricing Officer for fresh adjudication in the light of the OECD's February 2020 report on the transfer pricing of financial transactions, holding that the Transfer Pricing Officer's use of external bank guarantee rates with a discount was "not in accordance with the transfer pricing principles". In the very next paragraph it dealt with the secondary adjustment separately and allowed the ground, noting "that as per rule 10CB computation of interest commences from the due date of filing the return of income" and that for the year under consideration that due date was 15 February 2021, and concluding that it did "not find any basis for making the secondary adjustment for the year under consideration". The appeal was partly allowed for statistical purposes.
• Faith Intertrade v ITO ITATHelps taxpayer
  I obtained Form 3CEB from my accountant but never uploaded it, and the officer has levied the flat Rs 1 lakh penalty under s.271BA. Is that penalty automatic?
  It is not automatic. Section 271BA says the officer 'may' direct payment of the penalty, not 'shall', and s.273B forbids the penalty where the assessee proves reasonable cause. The Tribunal quashed a Rs 1,00,000 penalty on an assessee who had obtained the accountant's report dated 7 September 2013 but failed to upload it electronically, in the first year in which specified domestic transactions were brought within s.92E, where the TPO had made no adjustment at all.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.