Section 92CE(3) — the law in short
What the courts have decided on section 92CE(3), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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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.