Section 92D(3)

Section 92D(3) — the law in short

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

• ACIT v Dilipkumar V. Lakhi ITATHelps taxpayerValidity unconfirmed
  The TPO wants segment-wise profit and loss accounts for my AE and non-AE business and I cannot produce them. He has levied 2 per cent of the transaction value under s.271G. Can I resist it?
  Yes, where the failure is backed by a reasonable cause, because s.273B applies to s.271G. The Tribunal upheld the deletion of a Rs 56,72,162 penalty on a diamond trader who had furnished entity-level margins but could not split AE from non-AE segments, holding that in a trade where rough and polished diamonds move in mixed lots it is practically impossible to trace which rough stone became which polished stone, and that the assessee had substantially complied to the extent the trade allowed.
• Statutory position — s.92D(1)(ii) and s.92D(4) with Rule 10DA: the master file — PART A OF FORM 3CEAA IS FILED BY EVERY CONSTITUENT ENTITY EVEN IF NEITHER THRESHOLD IS CROSSED, and the two thresholds that both have to be crossed before Part B is due CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  Our group is nowhere near the master file thresholds. Do we still have to file anything under Rule 10DA?
  Yes. This is the most-missed compliance in Indian transfer pricing. Rule 10DA(3) says in terms: "The constituent entity shall furnish Part A of Form No. 3CEAA even if the conditions specified under sub-rule (1) are not satisfied." Every constituent entity of an international group files Part A, regardless of any threshold. Part B — the substantive master file information in clauses (a) to (n) of Rule 10DA(1) — is due only where BOTH conditions in sub-rule (1) are satisfied: (i) the consolidated group revenue of the international group for the accounting year, as reflected in its consolidated financial statement, exceeds FIVE HUNDRED CRORE RUPEES; AND (ii) the aggregate value of international transactions during the accounting year, as per the books of account, exceeds FIFTY CRORE RUPEES, or, in respect of purchase, sale, transfer, lease or use of intangible property, exceeds TEN CRORE RUPEES. The obligation itself comes from s.92D(1)(ii), which requires every person being a constituent entity of an international group to keep and maintain such information and document in respect of an international group as may be prescribed, and from s.92D(4), which requires the person referred to in that clause to furnish it to the authority prescribed under s.286(1) in the prescribed manner and by the prescribed date. Section 92D was substituted in this form by Act No. 23 of 2019 with effect from 1 April 2020; for assessment years 2018-19 and 2019-20 the same obligation sat in a proviso to s.92D(1), and s.92D(4) then referred to "the person referred to in the proviso to sub-section (1)". Rule 10DA(2) fixes that date as the s.139(1) due date for the return of income, and Rule 10DA(4) allows one designated constituent entity to file for all of them, provided the designation is conveyed in Form No. 3CEAB to the Joint Director referred to in Rule 10DB(1) THIRTY DAYS BEFORE the due date for furnishing Form No. 3CEAA.

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.