Section 92CE(1)

Section 92CE(1) — the law in short

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

• Tech Mahindra Ltd v DCIT — two independent answers to a secondary adjustment: the assessment year commenced before 1 April 2016, so the first proviso to s.92CE(1) shuts the section out; and there was no surviving primary adjustment for a consequential adjustment to attach to ITATHelps taxpayerValidity unconfirmed
  The TPO has re-characterised a payment to my associated enterprise as an interest-free loan and imputed notional interest on it, calling it a consequential adjustment. My year is well before 2016 and the underlying adjustment was itself deleted. Can he do that?
  No, on either of two grounds, and the ITAT Mumbai gave both on 24 August 2026 for assessment year 2008-09. First, there was nothing left for the imputed interest to attach to: the primary adjustment of Rs 440.12 crores on the exclusivity payment "was not ultimately made in the final assessment, pursuant to the directions of the Ld. DRP and after verification by the Ld.AO", and "Consequently, there was no surviving primary adjustment to which a consequential adjustment on account of notional interest could attach". Second, and independently, the year was out of range: "A.Y. 2008-09 is an assessment year commencing prior to 01/04/2016. Consequently, in view of proviso (ii) to section 92CE(1) of the Act, the provisions relating to secondary adjustment were not applicable to the transaction under consideration." The Tribunal deleted the notional-interest adjustment of Rs 72.34 lakhs on the exclusivity payment and the adjustment of Rs 69.82 crores on the upfront discount of Rs 524.93 crores carried forward from assessment year 2007-08, and applied the same reasoning mutatis mutandis to the transition fee. The appeal was partly allowed.
• Statutory position — s.92CE(1): the FIVE gateways into a secondary adjustment, the one crore threshold, the AY 2016-17 cut-off, and the word "and" that was retrospectively replaced by "or" CBDT Circulars & InstructionsCuts both ways
  The TPO's order says I must now make a secondary adjustment. Which primary adjustments actually trigger s.92CE, and is there any threshold or year below which the section simply does not apply to me?
  Section 92CE(1) is triggered by a primary adjustment to transfer price arising in any one of FIVE ways — made suo motu by the assessee in his return; made by the Assessing Officer and accepted by the assessee; determined by an advance pricing agreement entered into under s.92CC on or after 1 April 2017; made under the safe harbour rules framed under s.92CB; or arising from a resolution under the mutual agreement procedure under an agreement entered into under s.90 or s.90A. In any of those cases "the assessee shall make a secondary adjustment". The first proviso then takes the case out of the section altogether if EITHER (i) the amount of primary adjustment made in any previous year does not exceed one crore rupees, OR (ii) the primary adjustment is made in respect of an assessment year commencing on or before 1 April 2016. The word joining those two limbs was originally "and"; it was substituted by "or" by Act No. 23 of 2019 with retrospective effect from 1 April 2018, and that single word is what makes the exclusions workable.

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.