Section 92CA: what a reference to the TPO cannot decide

Key points

• A reference under section 92CA(1) is transaction-specific. It carries the arm’s length price of an identified international transaction and nothing else.
• A reference that identifies no transaction is not a valid reference. The officer receiving it acquires no jurisdiction to cure the defect by choosing a transaction himself.
• Whether a non-resident has a permanent establishment, and what profits are attributable to it, are questions for the Assessing Officer under the treaty, not for the Transfer Pricing Officer under section 92CA.
• Where the Tribunal restores an issue to the Assessing Officer, he cannot transfer it to the Transfer Pricing Officer by making a reference. A direction binds the officer to whom it is addressed.
• The requirement of recorded satisfaction and a hearing before a reference now rests on paragraph 3.4 of CBDT Instruction No. 3/2016, read with Vodafone India Services and Indorama Synthetics. The Gujarat High Court no longer follows its own contrary decision in Veer Gems on that point.
• A jurisdictional objection of this kind is a pure question of law and can be taken for the first time before the Tribunal, on the authority of National Thermal Power.
• The Finance Act 2026 has retrospectively removed two limitation arguments from this field, reaching back to 1 June 2007, 1 April 2009 and 1 October 2009. It has not touched the jurisdictional argument, nor the limitation argument that depends on it.

The distinction this article is about

Chapter X of the Income-tax Act 1961 creates a specialist. The Transfer Pricing Officer is not a second Assessing Officer with a different letterhead; he is an officer to whom one question may be sent, and who is competent to answer that question and no other. The question is the arm’s length price of an international transaction.

That sounds obvious when stated. In practice it is where a great many transfer pricing assessments come apart, because the reference is treated as a conveyance for the whole dispute rather than for a priced transaction. An Assessing Officer facing a hard question about whether a non-resident is taxable in India at all, and facing a deadline, has an obvious temptation: send the file to an officer who will do the work, and adopt what comes back. The architecture of Chapter X does not permit it, and this article sets out why, with the authorities, the administrative instructions, the Gujarat position, and what the Finance Act 2026 has recently taken out of the argument.

The occasion for writing it is a decision of the Mumbai Bench of the Tribunal, Ingram Micro (India) Exports Pte. Ltd. v. DCIT (International Taxation) 2(2)(1), ITA No. 1746/Mum/2016 with Cross Objection No. 70/Mum/2017, assessment year 2008-09, pronounced on 15 September 2026 by Smt. Beena Pillai, Judicial Member, and Shri Arun Khodpia, Accountant Member. An assessment determining income at Rs. 10,51,84,266, in proceedings that had begun with a transfer pricing adjustment proposed at Rs. 61,32,34,759, failed on a ground that had nothing to do with comparables, methods or margins. It failed because of who had decided what. A practical note for anyone citing the order: the Tribunal allowed the assessee’s legal ground and held that the assessment had no legs to stand on in the eyes of law, but it gave no express direction setting aside, quashing or annulling the assessment order, which is an obvious target on any further appeal or on an application to give effect to the order.

This is a topic article rather than a note on that order, and the authorities below extend well beyond the ones the Tribunal cited. Where a proposition rests only on Tribunal authority, that is said on the page rather than glossed over.

The statutory architecture: who decides what

Section 92CA(1) permits the Assessing Officer, with the previous approval of the Principal Commissioner or Commissioner, to refer the computation of the arm’s length price in relation to an international transaction to the Transfer Pricing Officer, where he considers it necessary or expedient to do so. The consolidated text referred to throughout is the Department’s own, at the 2026 edition of section 92CA. Since 1 April 2013 sub-sections (1), (2) and (3) have covered a specified domestic transaction as well as an international transaction; the discussion here is in terms of an international transaction, which was the only category in issue in the decision discussed below, and nothing turns on the difference for present purposes. The operative words are “in relation to the said international transaction”. The reference is of a transaction, not of a file.

Section 92CA(2) requires the Transfer Pricing Officer to serve a notice calling for evidence in support of the computation of the arm’s length price in relation to the international transaction referred to him. Section 92CA(3) requires him to determine, by order in writing, the arm’s length price in relation to that transaction, after considering the evidence and material. Section 92CA(4) then requires the Assessing Officer to compute the total income of the assessee in conformity with the arm’s length price so determined.

Two features of that sequence matter for everything that follows.

The first is that the subject matter travels. What goes to the Transfer Pricing Officer is a transaction, and what comes back is a price for that transaction. The statute does not contemplate a reference of the assessee, or of the assessment, or of a question such as whether the assessee is taxable in India.

The second is that the binding effect runs only to the price. Section 92CA(4) binds the Assessing Officer to the arm’s length price. It does not make the Transfer Pricing Officer’s views on anything else binding, and it does not transfer the computation of total income away from the Assessing Officer. The two functions are kept apart by the statute itself, and the distinction is not merely formal: it is what makes section 92CA(4) workable, because an officer can only be bound to a figure if the figure is the thing the other officer was asked to produce.

Sub-sections (2A) and (2B) do not disturb this. They provide, in terms, for the situation where an international transaction comes to the notice of the Transfer Pricing Officer during the proceedings before him, other than one referred to him, or one not reported in the accountant’s report. Their existence confirms the rule rather than displacing it: the legislature thought it necessary to make express provision for the officer to deal with an unreferred transaction, which it would not have needed to do if a reference carried general jurisdiction.

A point of chronology is worth recording here, because it is easy to get wrong. Sub-section (2A) was inserted prospectively, with effect from 1 June 2011 on the material examined, and was not given retrospective operation. Sub-section (2B) was inserted by the Finance Act 2012 but deemed inserted with effect from 1 June 2002, and so applies to much older years, subject to sub-section (2C), which bars the Assessing Officer from assessing or reassessing under section 147, or from passing an order enhancing the assessment, reducing a refund already made or otherwise increasing the liability under section 154, for any assessment year the proceedings for which were completed before 1 July 2012. For an assessment year such as 2008-09, therefore, (2B) formed part of the law and (2A) did not, except insofar as the proceedings before the Transfer Pricing Officer themselves ran on or after 1 June 2011. Where the reference was made in 2014 and the order passed in 2015, as in Ingram Micro, the proceedings did run on after that date, so (2A) operated procedurally; but the distinction should not be collapsed, and a blanket statement that both sub-sections applied to a 2008-09 assessment is wrong without that qualification.

A reference must identify the transaction

If the reference is of a transaction, a reference that identifies no transaction is nothing.

That was the second and independent ground in Ingram Micro. The reference recorded that, on the basis of statements taken during search proceedings, an Indian company was found to be carrying on the actual business on behalf of the non-resident, and that in view of the additional functions performed by that company the transactions required examination to determine whether they were at arm’s length. The Tribunal held that such a general reference, which named no international transaction between the assessee and the Indian company in respect of which a price was sought, could not be treated as a valid reference for determination of the arm’s length price.

This is not a technicality about drafting. The identification of the transaction is what gives the Transfer Pricing Officer something to do and what fixes the boundary of what he may do. Without it, the officer must choose his own subject matter, which is the one thing the statute reserves to the Assessing Officer acting with the Commissioner’s approval.

The administrative instructions say the same thing. Paragraph 3.6 of CBDT Instruction No. 3/2016 requires that the reference letter explicitly list the transactions referred. Where benchmarking is at the entity level, all international transactions are generally referred, but the listing requirement remains, and transactions excluded under paragraph 3.4 are to be kept out.

There is a practical consequence worth drawing out. A reference letter is a document the assessee is entitled to see, and its contents decide the outer limit of the proceedings that follow. In any matter where the transfer pricing adjustment is substantial, the reference letter and the Commissioner’s approval are the first two documents to call for, before any argument about comparables begins. If the letter names no transaction, or names transactions that do not match the ones the officer went on to examine, the point is available, and it is available as a question of law.

Whether a reference can be made in set-aside proceedings at all

A distinct question is whether a reference can be made for the first time in proceedings that follow a set-aside, where no reference was made in the original round.

Ingram Micro did not decide this in the abstract. Its holding was narrower and tied to the directions in that case: the Tribunal had restored the question of permanent establishment to the Assessing Officer, with directions to allow cross-examination of the persons whose statements were relied upon and to make inquiries, and the Assessing Officer could not, by making a reference, confer on the Transfer Pricing Officer jurisdiction over the very issue restored to him. The Tribunal was careful to add that even assuming a reference could validly be made in set-aside proceedings, the reference in that case failed for want of an identified transaction.

That caution is well placed, because there are three things pulling the other way, and anyone running this argument should expect all three.

The first is in the Act itself, and it is not new. Section 153(3) of the 1961 Act has, since 1 April 2022, provided for “an order of fresh assessment or fresh order under section 92CA, as the case may be” in pursuance of an order under section 254, section 263 or section 264 setting aside or cancelling an assessment or an order under section 92CA. The words “or fresh order under section 92CA” were inserted by the Finance Act 2022. So the statute recognised a fresh transfer pricing order following a set-aside well before the proceedings in Ingram Micro reached the Tribunal, and the Department will say that it would make no sense for the legislature to provide a time limit for an order while denying the reference that produces it.

The second is administrative, and it is the Board’s own direction. Paragraph 3.5 of CBDT Instruction No. 3/2016 provides that where a transfer pricing adjustment in an earlier year has been wholly or partly set aside by the Tribunal, the High Court or the Supreme Court on that issue, the case must be referred to the Transfer Pricing Officer. On its face that is an instruction to refer after a set-aside.

The third is the Income-tax Act 2025, which carries the provision forward and widens it. Section 286(1), in the table of time limits at Serial No. 5, contemplates a fresh assessment order or fresh order under section 166 made in pursuance of an order under section 359, section 363, section 377 or section 378 setting aside or cancelling an assessment order or an order under section 166. Section 166 is the counterpart of section 92CA and section 363 the counterpart of section 254. The genuine change between the two statutes is in the list of orders that trigger it: section 153(3) of the 1961 Act covers a set-aside by an order under section 254, 263 or 264 only, whereas the 2025 Act provision adds an order under section 359, which is the counterpart of section 250 and so brings in the first appellate authority.

The answers to those three points are available, but they have to be made rather than assumed.

To the statutory point, a provision prescribing a time limit assumes the existence of a power rather than creating one, and section 153(3) and section 286(1) both speak of a set-aside of “an order under section 92CA”, or under section 166, which is the case where a transfer pricing order already existed in the earlier round and has been set aside. That was not the position in Ingram Micro, where the first round carried no reference and no transfer pricing order at all, and what the Tribunal restored was a treaty question.

To paragraph 3.5, the same distinction applies with more force: the paragraph is directed to a case where an earlier year’s transfer pricing adjustment was set aside on the transfer pricing issue. It says nothing about a case where no adjustment was ever made under Chapter X and the set-aside concerned something else entirely. More fundamentally, paragraph 3.5 governs whether a case is referred; it does not enlarge what the Transfer Pricing Officer may then decide, and an instruction under section 119 could not in any event confer a jurisdiction the statute withholds.

To the 2025 Act point, the widening is about which appellate order triggers the time limit, not about what may be referred, and the transaction-specific limit in section 166(1) is unchanged.

There is a related point on the same Instruction that the Department had squarely available in Ingram Micro and that deserves to be stated rather than left out. Paragraph 3.3 of Instruction No. 3/2016 permits a reference in a case selected for scrutiny on non-transfer-pricing parameters in three circumstances, the third of which is where search, seizure or survey operations have been carried out and transfer pricing findings have been recorded. The reference in Ingram Micro rested precisely on information and statements recorded during search proceedings. The Board’s own instruction therefore contemplated a reference on those facts. The answer, again, is that paragraph 3.3 decides whether a case goes to the Transfer Pricing Officer and not what he may determine when it gets there, and that nothing in it authorises the reference of a question an appellate authority had restored to the Assessing Officer.

The scope of a remand binds the Assessing Officer

The first limb of Ingram Micro rests on a principle that long predates transfer pricing, and the older authority is stronger than the new.

In The Bhopal Sugar Industries Ltd. v. Income Tax Officer, Bhopal, decided on 2 September 1960 and reported at AIR 1961 SC 182 and (1960) 40 ITR 618, the Supreme Court held that an Income Tax Officer is bound to carry out the directions of the Tribunal, and that the correctness of the superior authority’s order is irrelevant to that duty. The Court described a refusal to do so as, in effect, a denial of justice, and as destructive of one of the basic principles in the administration of justice. The same discipline was restated in a different statutory setting in Union of India v. Kamlakshi Finance Corporation Ltd., AIR 1992 SC 711, where the Court held that the orders of higher appellate authorities must be followed, and that an appellate order is not displaced because the Department finds it unacceptable or has filed an appeal against it; the only exception is suspension by a competent court.

What a direction is, and how far it reaches, was settled in Rajinder Nath v. CIT, (1979) 120 ITR 14, decided on 13 August 1979. A direction, the Court held, must be an express direction necessary for the disposal of the case before the authority, and must be one the authority was empowered to give while deciding that case. An observation that an officer is free to take action is permissive and is not a direction at all. The significance for present purposes is that a direction cuts both ways: it obliges the officer to do what it says, and it marks out the ground on which he is to act.

On the Tribunal’s own side of the line, Hukumchand Mills Ltd. v. CIT, AIR 1967 SC 455, decided on 22 September 1966, construed the word “thereon” as restricting the Tribunal’s jurisdiction to the subject matter of the appeal. The case needs to be cited for that proposition and no more, because on its facts the Court permitted the Department a ground raised for the first time and upheld a remand for further inquiry, and left open whether the Tribunal can enhance an assessment. Mcorp Global Pvt. Ltd. v. CIT, (2009) 309 ITR 434, which followed it in holding that the Tribunal has no power to enhance, is likewise about the Tribunal’s powers and not about what an Assessing Officer may do after a set-aside; it should not be pressed into service for the latter.

The authority that does address the Assessing Officer directly is from Gujarat. In Saheli Synthetics (P) Ltd. v. CIT, (2008) 302 ITR 126, the High Court held that a set-aside assessment is always made in accordance with the directions given by the appellate authority, that it is not possible to classify a set-aside as either open or conditional, and that a set-aside cannot be used to expand the powers available to the Assessing Officer, which remain governed within the four corners of the subject matter of the appeal. Two cautions attach to this case. The Tribunal decision below, reported at [1996] 57 ITD 65 (Ahd), held the opposite, namely that on an in toto set-aside the entire assessment stood open and the officer was required to probe the case afresh on all aspects; it is the High Court’s view that governs, and the Tribunal decision should not be cited for the proposition. And the propositions attributed to the High Court above are taken from the way later decisions and reports quote it rather than from the report at 302 ITR 126, which should be read before the case is quoted in a pleading.

The principle was applied on facts close to the present ones in Engineering Professional Co. Pvt. Ltd. v. Dy. CIT, R/Special Civil Application No. 1997 of 2019, decided on 7 January 2020 and reported at (2020) 424 ITR 253. The Tribunal’s remand there, for assessment year 2004-05, was on the footing that section 44AD did not apply and that the assessee should justify a lower profit rate from its books. The Assessing Officer instead made fresh disallowances on unrelated issues and created additional liability. The High Court held that this was not sustainable, allowed the petition and remitted the matter with a direction to consider only the remanded claim. It also held that the availability of an alternative remedy was no bar to a writ petition, following CIT v. Chhabil Dass Agarwal, (2013) 357 ITR 357.

Two points of hygiene before leaving this ground. ITO v. Murlidhar Bhagwan Das is reported at (1964) 52 ITR 335 and not at 56 ITR 198, a transposition that circulates widely; its holding, restated cleanly in CIT v. Mohd. Shakoor Mohd. Bashir, AIR 1973 SC 2359, is that a finding means one absolutely necessary for the disposal of the appeal and not other incidental findings. And the Gujarat decision in Katira Construction, sometimes cited in this context, does not support anything on remand scope; the 2016 appeal was disposed of on CBDT monetary limits and the 2013 litigation of that name concerned a retrospective amendment to section 80IA(4).

The combined effect is straightforward. A set-aside is not an invitation to begin again on a clean sheet. It is an instruction to do a specified thing, and the officer who receives it is confined to that thing, cannot enlarge it, and cannot delegate it.

The Transfer Pricing Officer and the existence of a permanent establishment

Whether a non-resident has a permanent establishment in India is a question about liability. It is answered under Article 5 of the applicable treaty, on evidence about premises, people, agency and the conduct of business, and it determines whether India may tax the non-resident’s business profits at all. It is not a pricing question, and no method in section 92C is capable of answering it.

The Tribunal in Ingram Micro put the distinction in terms worth keeping: the determination of the existence of a permanent establishment is fundamentally distinct from the determination of an arm’s length price, and the jurisdiction conferred by section 92CA(1) is circumscribed by the statutory expression limiting it to the computation of the arm’s length price in relation to the international transaction referred. The expression “in relation to” could not be read as conferring an unrestricted power to adjudicate matters outside that function.

This proposition should be stated with its authority level shown. It is supported by Tribunal decisions. In Sava Healthcare Ltd. v. ACIT, ITA Nos. 1062 to 1068/PUN/2017, decided on 27 June 2019 and reported at (2019) 107 taxmann.com 226, the Pune Bench held that the Transfer Pricing Officer could not perform functions entrusted to the Assessing Officer, in a context where the officer had purported to decide where control and management of enterprises was situated. Ingram Micro relied on it, stating the principle emerging from it as being that the Transfer Pricing Officer cannot assume functions which are statutorily entrusted to the Assessing Officer, and Sava Medica Ltd. v. ACIT, decided by the Pune Bench on 30 August 2021, is reported as having considered the same decision and distinguished it on the facts.

No decision of a High Court or of the Supreme Court holding squarely that the Transfer Pricing Officer lacks jurisdiction to determine a permanent establishment has been traced. That matters for two reasons. The first is candour: this is a proposition at Tribunal level, and a reader deciding whether to run it should know that. The second is that Ingram Micro itself records that the Revenue’s appeal against Sava Healthcare was stated to be pending before the Bombay High Court. The Tribunal held, correctly, that the mere filing of an appeal does not dilute a decision in the absence of a contrary ruling of the High Court, which is the Kamlakshi Finance discipline applied to precedent. But it remains the position that the lead authority is under appeal, and no decision of the Bombay High Court on it is traceable as at October 2026.

There is also a decision pointing in a different direction that any honest treatment has to confront. In LG Electronics Inc. v. ADIT (International Taxation), decided by the Allahabad High Court on 5 August 2014, the Court held that an order of the Transfer Pricing Officer in respect of transactions between a foreign company and its Indian subsidiary did not preclude the Assessing Officer from examining whether a permanent establishment existed, because the transfer pricing order concerned the subsidiary and not the permanent establishment, and that where the transfer pricing analysis did not cover all risk-taking functions, profits might still have to be attributed to the permanent establishment for the functions and risks not covered. The writ petitions were dismissed and a notice under section 148 upheld.

That decision is double-edged, and it is fairer to say so than to cite it only for the half that helps. It supports the separation of functions, by treating the permanent establishment inquiry as the Assessing Officer’s own and not foreclosed by what the Transfer Pricing Officer has done. But it is a case about preserving the Department’s ability to tax a permanent establishment despite a transfer pricing order, not a case restricting the Transfer Pricing Officer. A Department advocate will cite it for the proposition that the two exercises are independent and that a transfer pricing order neither settles nor usurps the permanent establishment question. The assessee’s answer is that independence is precisely the point: if the exercises are independent, the officer who conducts one cannot conduct the other.

Attribution of profits is not an arm’s length price

A related confusion deserves separating out, because it is where the figures in these cases come from.

Once a permanent establishment is found, Article 7 attributes to it the profits it might be expected to make if it were a distinct and separate enterprise. The exercise draws on arm’s length reasoning, and that resemblance is what invites the error. But attribution under Article 7 and determination of an arm’s length price under section 92C are different operations with different objects. Attribution asks what part of an enterprise’s profits belongs to a fictional separate enterprise in India. Section 92C asks what price unrelated parties would have agreed for a specified transaction.

The leading authority on how the two relate is DIT v. Morgan Stanley and Co. Inc., (2007) 292 ITR 416, in which the Supreme Court held that where the associated enterprise in India is remunerated at arm’s length, taking into account all the risk-taking functions of the enterprise, no further profits need be attributed to the permanent establishment, the situation being different where the transfer pricing analysis does not adequately reflect the functions performed and the risks assumed.

That is the structure of the assessee’s own attribution ground in Ingram Micro, which should be stated because it was never decided. Ground 3.2 was that, considering the functions carried out by Ingram Micro India Private Limited, that company had been remunerated on an appropriate basis through the incentive mechanism, so that no further attribution of income was called for. Ground 4 was that 95 per cent of the business income could not be attributed to the Indian permanent establishment. Neither was reached.

The figures show how far the exercise had drifted. The Transfer Pricing Officer concluded that the assessee had a permanent establishment and proposed an adjustment of Rs. 61,32,34,759. The Assessing Officer then proposed to assess Rs. 72,39,55,039 by attributing the entire revenue earned by the Indian company to the assessee’s activities in India. The Dispute Resolution Panel upheld the permanent establishment, held that 95 per cent of the profits arising in India were attributable to it, but accepted that the adjustment could not exceed the whole of the assessee’s profits from its Indian operations, which it quantified at Rs. 11,07,20,280. The final assessment took 95 per cent of that figure, Rs. 10,51,84,266.

The Revenue’s cross objection, which is where the detail of the adjustment appears, should be stated as pleaded rather than paraphrased into something weaker. Its first ground was that the Panel had erred in giving relief in respect of the adjustment of Rs. 61,32,34,759 attributable to the permanent establishment, computed on the basis of a Singapore database, or alternatively Rs. 29,78,91,272 computed on Indian comparables, and that the officer’s adjustment should be restored. Its second ground was that the Panel had erred in holding that the combined profits of the associated enterprises could not exceed Rs. 11,07,20,280, because the officer had estimated those combined profits on arm’s length principles at the higher figure, and because no segmental accounts were maintained by the assessee for its India related operations. Its third ground was that, without prejudice, if relief were given on attribution based on proportionate turnover of Indian operations, the arm’s length adjustment should still be restored.

The segmental accounts point is the Department’s best argument on the cap and it is a real one: where an assessee keeps no separate accounts for its Indian operations, a figure said to represent the profits of those operations is itself an estimate, and the Panel’s cap was therefore being set by reference to a number of no greater authority than the one it displaced. The answer is not that the figure comparison is absurd but that the two numbers were measuring different things. Rs. 61,32,34,759 was presented as the combined profits of associated enterprises computed on arm’s length principles, while Rs. 11,07,20,280 was the assessee’s profit from Indian operations. An exercise that produces a combined-profit estimate and then applies it as an adjustment in the hands of one enterprise, capped by that enterprise’s own operating profit, has stopped pricing a transaction and started dividing an enterprise, which is an Article 7 exercise conducted under a Chapter X heading. Once the jurisdictional ground succeeded the cross objection was dismissed, and the Tribunal reached none of this.

The Assessing Officer’s application of mind, and the limit of that argument

Ingram Micro held that the Assessing Officer had relied on the conclusions of the Transfer Pricing Officer on the existence of a permanent establishment without independently examining the issue under Article 5, that the statutory responsibility for determining the assessee’s tax liability remained with him, and that an assessment founded solely on the section 92CA(3) order without independent verification or application of mind had no legs to stand on in the eyes of law.

This argument is powerful in its place, and it must be kept in its place, because stated broadly it is wrong.

Section 92CA(4) requires the Assessing Officer to compute total income in conformity with the arm’s length price determined by the Transfer Pricing Officer. Adopting that determination is not a failure of application of mind; it is obedience to the statute. The Delhi High Court said so in CIT v. Cushman and Wakefield (India) Pvt. Ltd., (2014) 367 ITR 730, decided on 23 May 2014, holding that the Transfer Pricing Officer’s report validating the arm’s length price is binding on the Assessing Officer, who cannot reassess that issue.

That case is frequently cited for the opposite of what it decides, so it is worth setting out what it actually holds. The Court held that the authority of the Transfer Pricing Officer is to conduct a transfer pricing analysis to determine the arm’s length price, and not to decide whether services were rendered or a benefit accrued; that disallowing expenditure on the ground that no benefit accrued is outside his authority, although he may find the arm’s length price to be nil where an independent enterprise would pay nothing, which is a different thing from disallowing expenditure; that the Assessing Officer may disallow under section 37 if the expense was not for the purposes of the business, and that this does not bypass the functions of the Transfer Pricing Officer; and that while the pricing determination binds the Assessing Officer, he may and indeed should examine whether the stated transactions are real and genuine.

So Cushman and Wakefield is authority for a division of labour in which each officer has a non-delegable part, and for the proposition that the Assessing Officer retains his own inquiry into genuineness and allowability. It is not authority that an assessment adopting a transfer pricing order is void.

The correct framing of the argument therefore follows the subject matter. Where the Assessing Officer adopts the Transfer Pricing Officer’s arm’s length price, he is doing what section 92CA(4) tells him to do. Where he adopts the Transfer Pricing Officer’s conclusion on something the statute never sent to that officer, such as the existence of a permanent establishment or the application of a treaty, he has abdicated a function that was never transferred, and there is no provision making that conclusion binding on him. That is the Ingram Micro situation, and framed that way the argument is defensible. Framed as a general rule that an assessment following a transfer pricing order is bad for want of independent thought, it collides with section 92CA(4) and will fail.

No High Court or Supreme Court authority for the general proposition has been traced. The authorities that appear in searches on similar language concern sanction under section 151, approval under section 153D, and the binding effect of directions of the Dispute Resolution Panel, which are different statutory contexts with their own provisions requiring a mind to be applied.

The Transfer Pricing Officer cannot recharacterise the transaction

The confinement of the officer to the transaction referred has a second aspect, which is that he must take the transaction as he finds it.

In CIT v. EKL Appliances Ltd., ITA Nos. 1068 and 1070 of 2011, decided by the Delhi High Court on 29 March 2012 and reported at (2012) 345 ITR 241, the Court held that whether or not to enter into a transaction is for the assessee to decide, that the financial health of an assessee can never be a criterion to judge the allowability of an expense, and and that while the quantum of expenditure can be examined by the Transfer Pricing Officer as the law permits, he has no authority to disallow the whole or part of the expenditure on the ground that the assessee has suffered continuous losses. He must examine the international transaction as he actually finds it. Restructuring legitimate transactions was described as a wholly arbitrary exercise.

The judgment identifies two exceptional circumstances, drawn from the OECD Guidelines, in which the actual transaction may be disregarded: where the economic substance of the transaction differs from its form, and where form and substance coincide but the arrangements viewed in their totality differ from those which commercially rational independent enterprises would have adopted and the actual structure practically impedes the tax administration from determining an appropriate transfer price. Two, not four, and the second limb carries its own threshold about impeding the administration, which is often dropped when the case is cited.

The link to the present subject is this. A power to recharacterise, if it existed at large, would let the officer reach conclusions about the real nature of the arrangement between a non-resident and an Indian entity, which is uncomfortably close to deciding whether the Indian entity is the non-resident’s establishment. EKL Appliances closes that route. The officer prices what is there.

Satisfaction and a hearing before the reference

Running alongside the question of what the Transfer Pricing Officer may decide is a question about how the reference is made in the first place, and here the law has moved through three administrative instructions and two lines of High Court authority.

CBDT Instruction No. 3/2003 dated 20 May 2003 required the Assessing Officer to satisfy himself that the assessee had entered into an international transaction with an associated enterprise, the primary source of that information being the accountant’s report under section 92E, and routed the reference through the previous approval of the Commissioner, which is the statutory requirement in section 92CA(1) itself. It carried a monetary trigger for picking up cases. The Supreme Court in PCIT v. S.G. Asia Holding (I) Pvt. Ltd., decided on 13 August 2019, held that the Instruction made a reference mandatory once that threshold was met, so that a failure to refer made the transfer pricing adjustment bad in law, although the assessment itself survived and the matter was restored. What Instruction No. 3/2003 did not do was require the assessee to be heard before the reference.

Instruction No. 15/2015 dated 16 October 2015 supplied that requirement. Its paragraph 3.2 made the recording of satisfaction a jurisdictional requirement in three situations and required an opportunity of being heard before the satisfaction was recorded. Instruction No. 3/2016 dated 10 March 2016 replaced it with immediate effect, and it is that Instruction which is operative; no later instruction replacing it has been traced, which is an absence of evidence rather than a positive confirmation, and is best stated that way.

The structure of Instruction No. 3/2016 repays attention because it contains two different sets of three that are regularly conflated. Paragraph 3.2 deals with cases selected for scrutiny where a transfer pricing risk parameter was among the reasons for selection, which must mandatorily be referred after approval of the Principal Commissioner or Commissioner. Paragraph 3.3 lists three circumstances in which a case selected on non-transfer-pricing parameters may nonetheless be referred, including where no accountant’s report was filed or a transaction was not disclosed in it, where a transfer pricing adjustment of Rs. 10 crore or more in an earlier year has been upheld by judicial authorities or is pending in appeal, and where search, seizure or survey operations have produced transfer pricing findings.

The provision that matters for a jurisdictional objection is paragraph 3.4. Before seeking the approval of the Principal Commissioner or Commissioner, the Assessing Officer must, as a jurisdictional requirement, record his satisfaction that there is an income or a potential of an income arising or being affected on determination of the arm’s length price. The three situations in which that satisfaction is required are where the assessee has not filed the accountant’s report under section 92E but the transactions come to the officer’s notice, where the assessee has not declared one or more transactions in the report and they come to his notice, and where the transactions are declared with qualifying remarks to the effect that they are not international transactions or do not affect income. In those situations the officer must provide an opportunity of being heard before recording satisfaction or otherwise, and where the assessee objects to the applicability of Chapter X he must consider the objection and pass a speaking order before making the reference. Paragraph 3.7 adds that where no reference is made the officer is not himself to determine the arm’s length price, and must record in the assessment order that the issue was not examined because of the Board’s Instruction.

The paragraph number is worth fixing in the memory, because getting it wrong is a wrong procedural reference of exactly the kind that costs credibility: the hearing requirement is paragraph 3.4 of Instruction No. 3/2016, and was paragraph 3.2 of the superseded Instruction No. 15/2015.

On the judicial side, the Bombay High Court in Vodafone India Services Pvt. Ltd. v. Union of India, Writ Petition No. 1877 of 2013, decided on 29 November 2013 and reported at (2014) 361 ITR 531, held that the existence of income, or a potential of income, arising from or affected by the international transaction is in the nature of a jurisdictional requirement, and that where the assessee challenges the very jurisdiction to tax under Chapter X, the grant of a personal hearing before referring the matter has to be read into section 92CA(1). Once the Assessing Officer has heard the assessee and formed the opinion that there is an international transaction and that income arises or is affected, the Transfer Pricing Officer is bound by that opinion and cannot reopen it. That last holding is important for the present subject, because it locates the jurisdictional question with the Assessing Officer at the front end and denies the Transfer Pricing Officer any power to revisit it. This is a different case from the better known Vodafone share premium litigation, which was Writ Petition No. 871 of 2014 decided on 10 October 2014 and accepted by the Board in Instruction No. 2/2015.

The Delhi High Court followed that line in Indorama Synthetics (India) Ltd. v. Addl. CIT, Writ Petitions (Civil) 6422 of 2013, 4558 of 2014 and 12072 of 2015, decided on 25 July 2016 and reported at [2016] 71 taxmann.com 349. It held that the requirement of a hearing is implicit in the nature of the procedure the Assessing Officer is expected to follow, that where a jurisdictional objection is raised it is incumbent on him to deal with it on merits, and that the three references before it had been made without affording the petitioner the opportunity of being heard required by law. The references were set aside with directions for a fresh speaking order on a fixed timetable. The Court also rejected the Revenue’s argument that Instruction No. 3/2016 operated only prospectively, holding that it clarified the correct legal position and, being procedural and beneficial to the assessee, applied to pending matters. Two notes on citation. The case numbers and the date given above are taken from the reports and could not be closed against the judgment itself. And of the two citations, [2016] 71 taxmann.com 349 is confirmed, while the parallel citation (2016) 386 ITR 665, by which the case is often cited and by which Ingram Micro cites it, could not be closed and should be checked in the volume before being relied upon. Ingram Micro also names the respondent as the Assistant Commissioner, whereas the respondent was the Additional Commissioner, so a citation should not be copied from that order.

The Gujarat position, and the Gujarat High Court’s retreat from it

For a practice in Ahmedabad this part of the subject is not academic, because the Gujarat High Court was for some years the outlier, and the way it changed course is instructive.

In Veer Gems v. ACIT, Special Civil Application No. 12648 of 2011, decided on 19 October 2011 by Akil Kureshi and Sonia Gokani JJ and reported at (2013) 351 ITR 35, the assessee contended that the enterprise it dealt with was not an associated enterprise, so that there was no international transaction and no jurisdiction to refer. The Assessing Officer referred the matter without deciding the objection, and the Transfer Pricing Officer then issued a show cause notice on whether an international transaction existed.

The Court held two things. The first, at paragraph 13, was that it did not find any provision under Chapter X which would require the Assessing Officer to hear the assessee before making the reference. The in-built safeguards were sufficient: the officer must form an opinion on the available material, which has what the Court called an ad hoc finality for the purpose of the reference, and the reference requires the previous approval of the Commissioner. The power could not be exercised arbitrarily or at whim or caprice, but no hearing was owed. The assessee could press its objection when the assessment was framed, and section 144C gave a further opportunity. The petition was dismissed.

The second holding was that the Transfer Pricing Officer had no jurisdiction to decide the validity of the reference or whether an international transaction existed, so that his show cause notice on that question was wholly erroneous; his task was only to determine the arm’s length price.

The first of those holdings has not survived, and what is striking is that it was the Gujarat High Court itself that departed from it. It did so in two stages. In Alpha Nipon Innovatives Ltd. v. DCIT, reported at (2016) 76 taxmann.com 166 and pronounced on 16 November 2016, the Court quashed a reference because the Assessing Officer had passed no speaking order and given no opportunity to show cause, following Indorama Synthetics. It should be said that Alpha Nipon did not confront Veer Gems; on the report examined it does not mention it, and it simply granted relief on the footing the later authorities establish. The decision that confronted it squarely came five years later. In Hitachi Hi Rel Power Electronics Pvt. Ltd. v. DCIT, Special Civil Application No. 23302 of 2019, decided on 19 August 2021 by J. B. Pardiwala and Ilesh J. Vora JJ and reported at (2021) 282 Taxman 520, the Court reproduced paragraphs 13 to 18 of Veer Gems in full, acknowledged that it was dealing with a decision of a co-ordinate Bench and that it would not have taken a minute to reject the contention by simply following it, and then held that it saw no good reason to take the view that no opportunity of hearing is required. It allowed the petition, quashed the reference under section 92CA(1) and the accompanying notice, found that the Assessing Officer had not recorded the satisfaction required, and remitted the matter for a hearing and a reasoned order within four weeks.

Notably, Hitachi Hi Rel did not distinguish Veer Gems as belonging to a period before Instruction No. 3/2016. It declined to follow it on the merits, resting on Vodafone, Indorama and the Board’s acceptance of the Bombay view.

The accurate way to state the position is therefore this. Veer Gems has never been reversed on appeal. But on the hearing question it has been expressly disapproved by the Bombay High Court in Vodafone India Services, the Delhi High Court has taken the contrary view in Indorama Synthetics, it is no longer followed by the Gujarat High Court itself, and it has been legislated against administratively by paragraph 3.2 of Instruction No. 15/2015 and paragraph 3.4 of Instruction No. 3/2016.

One further decision in this line needs care. Pr. CIT v. Veer Gems, Tax Appeal No. 338 of 2017, decided by the Gujarat High Court on 20 June 2017, is the merits sequel to the same dispute. In it the Court upheld the Tribunal’s finding that the assessee and the foreign enterprise were not associated enterprises under section 92A(2), so that the transfer pricing machinery never applied at all, and the same judgment also decided questions on cash credits under section 68 and on forward contracts. A citation reported at (2018) 407 ITR 639, in which the Revenue’s special leave petition was dismissed, is sometimes treated as a cash credits case unconnected with section 92CA; because the judgment appealed from decided both limbs, that assumption should not be made, and the volume should be checked before the citation is either relied on or dismissed.

That sequel is worth pausing on, because it is the best available answer to the reasoning that an assessee can simply raise its jurisdictional objection later. The assessee in Veer Gems lost the writ in 2011 on the footing that it could take the point when the assessment was framed. It took the point, and six years later it was held to have been right all along: there were no associated enterprises and no international transaction. Whatever the merits of refusing relief in writ proceedings, “you may raise it later” is cold comfort measured in years.

What survives of Veer Gems, and why it matters here

The second Veer Gems holding is not only intact; it is the Gujarat High Court’s own contribution to the proposition this article is about.

The argument built on it runs as follows. If the Transfer Pricing Officer has no jurisdiction to decide whether an international transaction exists, it is difficult to see how he can have jurisdiction to decide whether the non-resident is taxable in India at all through a permanent establishment, which is a question lying wholly outside Chapter X and resting on a treaty rather than on the Act.

That step should be presented as an argument from the authority rather than as a holding of it, because Veer Gems says nothing about permanent establishments, and the Department has an answer to it. Its answer is that the two questions are not points on a single scale. The reason the Transfer Pricing Officer cannot decide whether an international transaction exists is specific: the Assessing Officer has already formed that opinion at the reference stage, and on Vodafone India Services the officer is bound by it. That reasoning does not transplant itself to a treaty question on which the Assessing Officer formed no opinion at the reference stage at all. The assessee’s reply is that the absence of any opinion makes the position worse rather than better, since the officer then decided a question nobody had referred to him; but the step has to be argued.

What this gives a Gujarat assessee is a starting point in High Court authority rather than in Tribunal authority. Veer Gems is a decision of the High Court, it is binding in Gujarat, it has never been reversed, and on this limb it is consistent with Vodafone India Services. The extension to the treaty question is then an argument from that authority, with the Sava Healthcare and Ingram Micro line supplying Tribunal decisions that have accepted it.

Taking the point late

A jurisdictional objection of this kind is often not taken at the time, for understandable reasons: the reference is an internal step, its contents may not be apparent until much later, and the assessee’s attention at the time is on the comparables. The question is whether it can be taken afterwards.

It can, if it is a pure question of law resting on facts already on record. The authority is National Thermal Power Co. Ltd. v. CIT, reported at (1998) 229 ITR 383 and (1997) 7 SCC 489, decided on 4 December 1996. The Supreme Court held that the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and which has a bearing on the tax liability of the assessee, even though it was not raised earlier. Section 254 is couched in the widest possible terms, and nothing in it prevents the Tribunal from entertaining such a claim. The Court added that the Tribunal retains a discretion whether to allow a new ground, and the essential condition is that the facts relating to the ground are on record. The date is worth getting right: the citation is to 1998 but the judgment is of December 1996, so describing it as a 1998 ruling is wrong.

Jute Corporation of India Ltd. v. CIT, (1991) 187 ITR 688 and AIR 1991 SC 241, decided on 4 September 1990, is the decision National Thermal Power followed, and it is the foundation of this line. But its holding is that the power of the first appellate authority is co-terminus with that of the Income Tax Officer, so that an additional ground may be entertained at that stage. It is authority for the Commissioner (Appeals), not for the Tribunal, and citing it for the Tribunal’s power overstates it. The correct chain is Jute Corporation for the first appellate authority, National Thermal Power for the Tribunal.

In Ingram Micro the Tribunal admitted the ground on exactly this basis, holding that the issue was a pure question of law going to the root of the matter whose adjudication required no fresh facts, and recording that the Departmental Representative, while opposing admission, could not point to anything displacing the assessee’s right. Two practical features of that admission are worth noting. The ground was taken by a separate application years after the appeal was filed in 2016. And the Tribunal decided it first, before the merits, on the footing that a legal issue going to the root of the assessment must be considered first. Both are ordinary, and both are available.

Ingram Micro: the facts, the holding, and a note on reading the order

The assessee was a company incorporated in Singapore within the Ingram Micro group, which commenced business in September 2001 to expand the group’s customer base in India, Bangladesh and Sri Lanka and to serve Indian customers procuring products from outside India under a customs duty exemption scheme. Its case was that its management and day-to-day operations were conducted from Singapore, and that it procured sales processing, marketing and bookkeeping support from an Indian company in the group, Ingram Micro India Private Limited, the remuneration for which reached that company as rebate incentives paid directly by third party vendors on sales made in India.

No return was filed initially, on the footing that business income was not taxable in India under Article 7 read with Article 5 of the India-Singapore treaty for want of a permanent establishment, and no report in Form 3CEB was filed because the rebate incentives were paid by the vendors directly to the Indian company. A notice under section 142(1) dated 11 November 2009 was served, and a return declaring nil income was filed on 20 November 2009 under protest. The draft order of 31 December 2009 added the whole of the rebate incentives received by the Indian company, treating that company as the assessee’s permanent establishment. The Panel confirmed it on 29 September 2010 and the final order followed on 14 October 2010.

On appeal, the Tribunal set that assessment aside on 7 February 2013 and restored the matter to the Assessing Officer with two directions: to give the assessee an opportunity to cross-examine the individuals whose statements recorded during search and seizure proceedings had been relied upon, and to adjudicate afresh, including examination and verification of the question whether the assessee had a permanent establishment in India. The assessee was permitted to file documents and contentions, and the officer was to make necessary inquiries before finalising the draft order.

In the proceedings that followed, the Assessing Officer referred the case to the Transfer Pricing Officer under section 92CA(1), stating that on the basis of information and statements recorded during the search the Indian company was found to be carrying on the actual business on behalf of the assessee, and that in view of the additional functions performed the transactions required examination for arm’s length. Questionnaires were issued on 1 May 2014, on 25 September 2014 and on subsequent dates. The order under section 92CA(3) followed on 30 January 2015, concluding that there was a permanent establishment and proposing the adjustment already described. The draft order of 27 March 2015 adopted that conclusion, the Panel gave its directions on 28 December 2015, upholding the permanent establishment and applying 95 per cent while capping the adjustment, and the final order of 28 January 2016 determined income at Rs. 10,51,84,266.

The Tribunal held that the reference, insofar as it sought to transfer the determination of the existence of a permanent establishment to the Transfer Pricing Officer, was beyond the scope of the remand directions; that independently, the Transfer Pricing Officer exceeded the jurisdiction conferred by section 92CA by determining the existence of a permanent establishment and the consequent taxability of profits without confining himself to the arm’s length price of a specific international transaction referred to him; and that his findings on those matters could not be sustained. It added that the Assessing Officer had not independently verified the issue and had proposed the addition merely on the basis of the section 92CA(3) order. The additional ground was allowed, the Revenue’s cross objection dismissed, and the appeal allowed on the legal ground.

A word on reading the order itself, because it contains several internal inconsistencies that anyone citing it should know about in advance rather than discover in court. The cause title gives the assessment year as 2008-09 while the opening paragraph refers to assessment year 2007-08. The opening paragraph describes the appeals as arising out of an order dated 29 October 2016, whereas the grounds and the body of the order identify the final assessment order as dated 28 January 2016. The dates of the additional ground applications are given variously as 31 March 2023 and 31 March 2021 for the ground that was admitted and allowed, and as 11 October 2022 and 11 October 2021 for one of those dismissed. The order describes the Singapore company as a wholly owned subsidiary of the Indian company, which is the reverse of the structure one would ordinarily expect where the Indian entity is said to be the non-resident’s establishment, and the two appeals carry different permanent account numbers, AACCI1800M and AABCT1296R, for what is described as the same assessee. Four further slips are worth knowing before an opponent finds them: the opening paragraph calls the matters “cross appeals by assessee and revenue” when the Revenue’s filing is a cross objection; ground 5.3 refers back to “ground 6.1 and 6.2 above” where it means 5.1 and 5.2; the grounds recite the impugned order as passed under section 144C(13) read with sections 143(3) and 254 while the additional ground recites section 143(3) read with sections 144C(13) and 254; and on the order’s own list of the three applications, given as 31 March 2023, 11 October 2022 and 28 March 2023, no application dated 11 October 2021 or 31 March 2021 exists at all, although both dates appear later in the order. None of this affects the ratio, but a citation should be to the ITA number, the bench and the date of pronouncement rather than to any of the internally inconsistent particulars.

What Ingram Micro did not decide

Two matters were expressly left open and several more were simply not reached. The distinction is worth preserving, because a point a Tribunal expressly leaves open is in a different position from one on which its order is merely silent.

Expressly left open, at paragraph 6.14, were the applicability and retrospective operation of the later CBDT Instructions, and the precise consequence of the assessee not having objected to the reference before the Assessing Officer at the time it was made. The Tribunal held that, having reached its conclusion on the jurisdictional issue, it did not need to enter into either, because the appeal could be decided on the narrower ground.

The arguments behind that refusal are worth recording, because they will recur. The assessee argued that, no report in Form 3CEB having been filed, the Assessing Officer was required to record satisfaction and give a hearing before making the reference, relying on Instructions No. 3/2003, 15/2015 and 3/2016 and on Indorama Synthetics, and contending that the later Instructions were clarificatory and procedural and so applied retrospectively.

The Revenue’s threshold answer, which is its most basic and is often the only one that needs answering, was that the assessee had not denied having entered into an international transaction with its associated enterprise, so that the Assessing Officer was justified in making a reference, and that the mere fact that Form No. 3CEB had not been furnished could not by itself invalidate a reference under section 92CA. It added that Instruction No. 3/2003 contained no requirement of a prior hearing, that Instruction No. 15/2015 was prospective and an officer could not be expected to comply with a requirement that did not exist when he acted, and that the assessee, having participated before the Transfer Pricing Officer without objecting at the stage of the reference, could not challenge it later. The assessee’s reply on the threshold point was that it had consistently brought to the authorities’ notice that it had not filed Form No. 3CEB and that no reference had been made in the first round of proceedings, and on the participation point that the objection had been taken before the Panel, at pages 12 and 13 of its directions of 28 December 2015.

For a reader that means two things. The retrospectivity question remains open at Tribunal level in Mumbai, notwithstanding that the Delhi High Court decided it in Indorama Synthetics and the Gujarat High Court applied the Instruction in Hitachi Hi Rel. And the acquiescence argument has not been answered. The assessee’s response in Ingram Micro, that the objection was taken before the Panel, is a good answer on those facts but not a general one.

Not reached at all, and not expressly reserved either, were the following. Ground 1, that the Transfer Pricing Officer, the Assessing Officer and the Panel had failed to follow the specific directions of the Tribunal’s order of 7 February 2013 in entirety and spirit, was never disposed of in terms, although its substance was decided through the additional ground. The permanent establishment grounds, the attribution grounds and the 95 per cent were not decided, nor was the cap the Panel applied.

Nor was ground 5, on interest, and it deserves more than a mention because it raises two distinct propositions. The first is that no interest under sections 234A and 234B is leviable on this assessee as a non-resident, a question on which there is a settled line in the taxpayer’s favour where the payer was obliged to deduct tax at source, including DIT (International Taxation) v. NGC Network Asia LLC, (2009) 313 ITR 187 (Bom), where the Court held that no interest could be imposed on the assessee where the payer was under a duty to deduct tax at source and failed to do so, and DIT v. Jacabs Civil Incorporated in the Delhi High Court to the same effect. The second, pleaded in the alternative at ground 5.3, is that interest under section 234B cannot run up to the date of the final assessment order passed in proceedings remanded by the Tribunal. That is a real question, it is not covered by the authority on the first proposition, and no decision on it is cited here because none was traced. Anyone running it should expect to argue it from first principles on the language of section 234B and the character of a giving-effect order.

The limitation grounds that died, and what killed them

The most consequential part of Ingram Micro for practice may be the part the Tribunal disposed of in a few sentences, and it is easy to misread.

All three additional grounds were pleaded as limitation grounds. Two of them challenged the orders of the Transfer Pricing Officer and the Assessing Officer as passed beyond the period of limitation on their own footing, and senior counsel submitted that those applications might be treated as infructuous in view of amendments brought in by the Finance Act. They were dismissed as infructuous.

The third, which was admitted and allowed, was also headed as a limitation ground. It read that the impugned order under section 143(3) read with sections 144C(13) and 254 was barred by limitation and liable to be quashed, and the reason given was that the Assessing Officer had erred in referring the case to the Transfer Pricing Officer, which was not required by the direction of the Tribunal, so that the final order was barred by limitation and void.

The mechanism behind that pleading matters, because it is the one limitation argument in this field that the Finance Act 2026 does not appear to touch. Section 153(4) extends the period for completing an assessment or reassessment by twelve months where a reference under section 92CA(1) is made during the course of the proceeding. If the reference was no reference at all, the extension never operated, and the final order falls outside time. That is why the assessee pleaded an invalid reference as a limitation point and asked for the order to be quashed.

The Tribunal decided the ground purely as a question of jurisdiction. It held the reference beyond the scope of the remand, held the Transfer Pricing Officer to have exceeded his jurisdiction, held the assessment to have no legs to stand on, and allowed the ground. It said nothing about section 153(4), nothing about limitation, and nothing about the relief of quashing that the ground had sought. So the limitation limb of the surviving ground remains undecided, and the practitioner’s point is that it is still there to be run.

It follows that the common summary, that the assessee abandoned limitation and won on jurisdiction, is not quite right. It abandoned the two limitation grounds that stood on their own and kept the one that depended on the invalidity of the reference, and it won on the jurisdictional premise of that ground without the Tribunal going on to the limitation conclusion built on it.

The order attributes the amendments that made the other two grounds infructuous to the Finance Act 2025. On the material examined for this article, the amendments that have that effect are in the Finance Act 2026, which is Act No. 4 of 2026 and received the President’s assent on 30 March 2026, with Gazette publication on 31 March 2026. The hearing in Ingram Micro concluded on 19 June 2026, so the Finance Act 2026 was available to counsel, and the reference to the Finance Act 2025 appears to be a slip. It should be said plainly that this is an inference from the content of the two Acts rather than anything the order states. The particulars of the Finance Act 2026 set out in the next three sections have been checked against the Act as published by the Income Tax Department, which gives it as Act No. 4 of 2026 with assent on 30 March 2026, and against the Department’s own consolidated text of section 92CA at the 2026 edition. A pleading should nonetheless cite the provisions from the Act rather than repeat the order’s attribution.

What the Finance Act 2026 did, in this field, was reach backwards twice.

Section 92CA(3AA) and the sixty-day computation

Section 92CA(3A), inserted with effect from 1 June 2007, requires the Transfer Pricing Officer to pass his order at any time before sixty days prior to the expiry of the limitation period under section 153 or section 153B. Its proviso matters as much as the main limb: where the period available to him falls under clause (ii) or clause (x) of Explanation 1 to section 153 and is less than sixty days, it is extended to sixty days. The 2025 Act keeps both, the main limb at section 166(7) and the proviso at section 166(8). How the sixty days is counted had become a live and valuable point.

In DCIT v. Saint Gobain India Pvt. Ltd., a batch of writ appeals including Writ Appeal Nos. 1115, 1120, 1139, 1148, 1149, 2035, 2036, 2039, 2043 and 2066 of 2021, decided by a Division Bench of the Madras High Court on 31 March 2022, the Court held that where the limitation period expired on 31 December 2019, that date had to be excluded, so that the order had to be passed before 1 November 2019, that is, on or before 31 October 2019. It rejected the Revenue’s reliance on the General Clauses Act, and held that “may” in section 92CA(3A) had to be construed as “shall”, reasoning that rested substantially on the proviso and on the mandatory character it gives the period. Orders passed a day late were therefore bad.

New section 92CA(3AA), inserted by the Finance Act 2026 and deemed inserted with effect from 1 June 2007, now provides that notwithstanding anything contained in any judgment, order or decree of any court, the calculation of sixty days shall be made and shall always be deemed to have been made in a specified manner: where the limitation expires on 31 March of a year that is not a leap year, the order may be made up to 30 January of that year; where it expires on 31 March of a leap year, up to 31 January; and where it expires on 31 December, up to 1 November.

Set against Saint Gobain, the effect is precise and modest in appearance: the Department gains exactly one further day on each limb, 1 November instead of 31 October, and 30 January instead of 29 January. It is worth stating the change in those concrete terms rather than describing the provision vaguely as a clarification, because the practical consequence is not modest at all. Every assessment in the pipeline that had been annulled or was under challenge on a one-day computation now has that ground removed, retrospectively, across nineteen years.

One thing the provision does not do should be stated carefully. There is no validation clause and no saving clause. The override operates through the non-obstante opening words and through the retrospective deeming of the method of computation. Whether that is enough to disturb an assessment already annulled by a final and unappealed decree is a different question from whether the ground survives in a pending matter, and it would be wrong to write that the Act validates annulled orders. It removes the ground; it does not expressly revive the order.

The sections 144C, 153 and 153B package, and the Shelf Drilling reference

The second retrospective intervention addresses a larger controversy about whether the time taken by proceedings before the Dispute Resolution Panel falls inside or outside the limitation period for completing the assessment.

The Finance Act 2026 inserted six sub-sections, in mirrored pairs. Section 144C(4A), section 144C(13A) and section 153(10) are deemed inserted with effect from 1 April 2009. Section 144C(4B), section 144C(13B) and section 153B(1A), which are the counterparts facing section 153B, are deemed inserted with effect from 1 October 2009. Each opens with the words “Notwithstanding anything contained in any judgment, order or decree of any court”. Their combined effect is that the limits in section 153 and section 153B govern the making of the draft order under section 144C(1), and that the period thereafter is governed, and shall always be deemed to have been governed, by section 144C(4) and by section 144C(12) and (13).

The litigation this displaces is substantial and is not over. The Bombay High Court had held in Shelf Drilling Ron Tappmeyer Ltd. v. ACIT (International Taxation), (2023) 457 ITR 161, that the section 153(3) limit governed, so that a final order could not be passed beyond it. On appeal a two-judge Bench of the Supreme Court delivered a split verdict on 8 August 2025. The neutral citation is given in the sources examined as 2025 INSC 946 and the reported citation as [2025] 177 taxmann.com 262, and the matter is said to arise from Special Leave Petitions (Civil) Nos. 20569 to 20572 of 2023 heard with SLP (Civil) No. 25798 of 2024, Diary No. 35225 of 2023; none of those particulars, nor the citation (2023) 457 ITR 161 for the decision appealed from, could be closed against a primary report, so they should be checked before use in a pleading. What is confirmed is the date, the split, and the substance of the two opinions. Satish Chandra Sharma J. held that the section 153 timelines apply only up to the draft order under section 144C(1), the Panel and the Assessing Officer timelines under section 144C(5) to (13) running in addition. Nagarathna J. held that all section 144C procedures must be completed within the twelve months in section 153(3). The Bench directed the Registry to place the matters before the Chief Justice of India for the constitution of an appropriate bench to consider the issues afresh.

As at October 2026 that larger bench has not decided the question, and on the material traced it has not been constituted. The Hyderabad Bench of the Tribunal, in orders dated 23 September 2026, recorded the issue as pending adjudication before the Supreme Court by a larger bench yet to be constituted. The Delhi Bench, in Giesecke and Devrient MS India P. Ltd. v. ACIT, pronounced on 30 January 2026, is reported as having recorded that the matter had been referred to the Chief Justice, and as having recorded the Supreme Court’s interim order of 22 September 2023 directing that the Bombay High Court judgment should not be cited as a precedent in any other subsequent matter. The existence of that interim order is confirmed and it remains in force; the contents of the Tribunal order are taken from a report rather than from the order itself. It should be said that this account rests on judicial statements in Tribunal orders and on a search of indexed Supreme Court judgments rather than on the Court’s own registry record, which is behind a verification step that could not be completed. A party needing the next listing date should have the matter checked directly on the Court’s record by party name as well as by the diary number given above, since that number is itself unconfirmed.

On the reports examined, the amendment is already working through at Tribunal level. The Mumbai Bench in UCB India Pvt. Ltd., on 31 August 2026, is reported as having recorded the insertion of sections 144C(4A), (13A) and (13B) and section 153(10) with retrospective effect and held the limitation ground before it rendered infructuous. That order could not be traced in full, so it is recorded here as a report rather than as verified authority; but it is the same move the assessee made in Ingram Micro, and if accurate it suggests the concession there was realistic rather than tactical.

Whether the amendment also lets the Department reopen orders already passed is a separate question, and it is open. On the reports examined, the Hyderabad Bench in its orders of 23 September 2026 held that because the amendments received the President’s assent only on 30 March 2026, the subsequent amendment by the Finance Act 2026 would not constitute an apparent mistake in an order of the Tribunal already passed. Those orders could not be traced in full and the reasoning as reported does not obviously follow from the assent date, so it should not be relied on as settled. Pulling the other way is a long line beginning with M.K. Venkatachalam v. V.O. Bombay Dyeing and Manufacturing Co. Ltd., (1958) 34 ITR 143, in which the Supreme Court held that a retrospective amendment can make an earlier order a mistake apparent from the record, with ACIT v. Saurashtra Kutch Stock Exchange Ltd., (2008) 305 ITR 227, to similar effect where binding law was overlooked. Anyone holding a favourable order on limitation should assume that a rectification application is possible and be ready to meet it, rather than treat section 254(2) as closed.

The retrospectivity is itself under challenge

None of this is yet stable, because the retrospective amendments are under constitutional challenge.

On the reports examined, the Madras High Court issued notice to the Union and the Income Tax Department on 15 June 2026 on a writ petition by the Revenue Bar Association challenging the Finance Act 2026 retrospective amendments, specifically section 92CA(3AA) operating from 1 June 2007, the sections 144C, 153 and 153B package, the provisions concerning sections 147 and 147A, and section 292BA. The reports give the Bench as the Chief Justice and Arul Murugan J., record that the petitioner argued through Mr Arvind Datar that a non-obstante clause overriding judgments violates the separation of powers and that the amendments nullify High Court judgments including matters pending before the Supreme Court, record the Additional Solicitor General as opposing on locus and on the abstract nature of the challenge, and record directions for a counter affidavit within four weeks and a rejoinder two weeks thereafter, with the matter listed for 21 July 2026.

Every particular in that paragraph is taken from press reports. None of it could be closed against the Court’s own record, the petition number is not reported, and no development after the 21 July 2026 listing has been traced. It is set out because a challenge of this kind bears directly on how much weight to place on the amendments, and it should be treated as a reported pendency rather than as an established position, with nothing assumed about the outcome.

There are also press reports, dated 5 February 2026, that the Board directed departmental counsel to seek adjournments in litigation affected by what was then the Finance Bill 2026, covering sections 92CA, 144C, 153 and 153B, 147A and 292BA. No instruction number or date is given in those reports and the instruction itself could not be located, so it is recorded here as a press report and not as a Board instruction.

The asymmetry with the Income-tax Act 2025

One feature of the Finance Act 2026 deserves separate treatment, because it is the kind of thing that is visible only when the two statutes are read together.

The retrospective provisions described above amend the Income-tax Act 1961. The Finance Act 2026 also made corresponding amendments to the Income-tax Act 2025, in section 166 for the sixty-day computation, in section 275 for the Dispute Resolution Panel package, in section 286 for the limitation limb, and in section 279 for the counterpart of the new section 147A. Which sub-section of each was inserted or amended could not be closed against the Gazette text and is therefore not stated here; what is confirmed, and what matters, is that every one of those 2025 Act amendments takes effect from 1 April 2026, prospectively.

So the same legislative intervention reaches back as far as 1 June 2007 under the old Act and only forward under the new one. For the 1961 Act, which now governs only closed and pending years, the Department gains up to nineteen years of retrospective effect. For the 2025 Act, which governs the years ahead, the identical provisions operate from commencement. Whatever view one takes of the merits, the asymmetry is a fair description of what has happened, and it is part of the argument in the Madras High Court petition.

Three further retrospective provisions of the Finance Act 2026 sit alongside these and are worth knowing, because they close off other procedural grounds: new section 147A, operating from 1 April 2021, which provides that the Assessing Officer for sections 148 and 148A means an officer other than the National Faceless Assessment Centre or a unit under section 144B, and which expressly overrides section 151A as well as any judgment; new section 292BA, from 1 October 2019, on defects in quoting a Document Identification Number; and new section 292BC, from 1 April 2021, on electronic approvals, together with the substitution in section 144B(6)(i)(b), from 1 April 2022, of authentication by electronic communication for authentication by digital signature. The Income-tax Act 2025 counterparts of the Document Identification Number, electronic approval and faceless authentication provisions could not be closed against the primary text and are therefore not stated here.

The position under the Income-tax Act 2025

Because the Income-tax Act 2025 is in force from 1 April 2026, the question for anything other than a legacy year is whether the reasoning in this article survives the new statute. On the substance, it does.

Section 166 of the 2025 Act is the counterpart of section 92CA. The concordance for the sub-sections that matter is this: section 92CA(1) corresponds to section 166(1); section 92CA(2) to section 166(4); section 92CA(2A) to section 166(5)(a); section 92CA(2B) to section 166(5)(b); section 92CA(3) to section 166(6); section 92CA(3A) to section 166(7); section 92CA(4) to section 166(11); section 92CA(5) to section 166(13); section 92CA(7) to section 166(14); and the Explanation defining the Transfer Pricing Officer to section 166(17). The surrounding provisions map as follows: section 92 to section 161, section 92A to section 162, section 92B to section 163, section 92BA to section 164, section 92C to section 165, section 92E to section 172, section 153 to section 286, section 253 to section 362 and section 254 to section 363.

The architecture is reproduced. Section 166(1) retains the reference by the Assessing Officer with the prior approval of the Principal Commissioner or Commissioner; section 166(6) retains the determination of the arm’s length price by order in writing; section 166(11) retains the obligation on the Assessing Officer to compute total income in conformity with that price. Nothing in section 166 confers power to determine the existence of a permanent establishment, to apply a treaty, or to recharacterise a transaction. The confinement of the officer to the priced transaction is therefore the position under the new Act as it was under the old, and the Ingram Micro reasoning carries across unchanged.

What is new is the reach of a single determination and a new bar on references. Section 166(9) permits an arm’s length price determined for one year to be applied to similar transactions of the two following years where the assessee opts in and the Transfer Pricing Officer declares the option valid, with section 166(10) excluding proceedings under Chapter XVI-B. Section 166(12) then provides for the officer to determine the price for the two following years and for the Assessing Officer to recompute. The provisions that matter for jurisdiction are section 166(2), under which no reference may be made under section 166(1) in relation to a transaction for which the option has been declared valid, and section 166(3), under which section 166(1) has effect as if no reference were made for such a transaction. Both are transaction-specific, which is consistent with the rest of the section and with the theme of this article. Those are new grounds of objection rather than new powers, and they narrow rather than widen the reference mechanism.

Two features of the drafting should be confronted rather than noted in passing. The first is section 286(1), Table, Serial No. 5, already discussed, which contemplates a fresh order under section 166 following a set-aside, carrying forward what section 153(3) of the 1961 Act has said since 1 April 2022 and adding an order of the first appellate authority under section 359 to the list of triggers. The second is in the other direction: section 363(1) retains the words “pass such orders thereon as it thinks fit” verbatim, so the construction of “thereon” in Hukumchand Mills, confining the Tribunal to the subject matter of the appeal, carries forward into the new Act intact. That is the cleanest bridge from the older remand authorities to the current statute.

How the Department will answer a jurisdictional objection

It is worth setting out the Department’s best case, because an objection of this kind is met with a settled set of answers and the weak forms of the argument do not survive them.

The first answer is participation. The assessee appeared before the Transfer Pricing Officer, filed submissions, answered questionnaires and did not object to the reference at the time; having taken the chance of a favourable outcome, it cannot complain of the forum afterwards. This is a real argument, and it is the one Ingram Micro left undecided. The answer is that jurisdiction cannot be conferred by acquiescence where the statute does not confer it, and that the objection in that case was in fact taken before the Panel. The practical lesson is the obvious one: take the objection in writing, early, and to the officer making the reference.

The second answer is substance over form. The Transfer Pricing Officer examined functions, assets and risks, which is the ordinary stuff of a transfer pricing analysis, and the conclusion about a permanent establishment was incidental to it; what matters is that the Assessing Officer adopted it, which he was entitled to do. The answer is that a conclusion on liability is not made incidental by the route taken to it, and that section 92CA(4) makes only the price binding. The force of the answer depends on the record: where the order under section 92CA(3) reads as a permanent establishment order with a price attached, as it did in Ingram Micro, the objection is strong.

The third answer is that no prejudice resulted, because section 144C gave the assessee a full hearing before the Panel and the Panel itself considered the permanent establishment. This is the reasoning that persuaded the Gujarat High Court in Veer Gems to refuse relief. The answer is the one the Veer Gems sequel supplies: a later opportunity is not a cure for a decision taken by an officer who had no power to take it, and in that very case the assessee turned out to have been right on the jurisdictional fact six years later.

The fourth answer is statutory and administrative together: section 153(3) has expressly contemplated a fresh order under section 92CA since 1 April 2022, section 286(1) of the 2025 Act carries that forward, and paragraph 3.5 of Instruction No. 3/2016 directs a reference where an earlier year’s adjustment was set aside on the transfer pricing issue. The answers to all three are given above, and they turn on the fact that each provision addresses the case where a transfer pricing order or adjustment already existed and was itself set aside.

The fifth is limitation in reverse: that if the reference falls, the assessment should be restored for a fresh order rather than quashed. This is where S.G. Asia Holding cuts for the Department, because there the Supreme Court held the failure to make a mandatory reference made the adjustment bad while leaving the assessment intact and restoring the matter. The counter is that Ingram Micro dealt with an assessment that had already been through one set-aside and a second round, and that the Tribunal’s conclusion was that the assessment had no legs to stand on rather than that it needed redoing.

Preserving the point

For a matter in progress, the sequence that keeps this argument alive is short and mostly about documents.

Call for the reference letter under section 92CA(1) and the Principal Commissioner’s or Commissioner’s approval, and read them against the order eventually passed under section 92CA(3). The question is whether the transactions examined are the transactions referred, and whether any transaction was named at all.

Where no accountant’s report under section 92E was filed, or where a transaction was not declared in it, or where it was declared with qualifying remarks, paragraph 3.4 of Instruction No. 3/2016 is engaged. Ask for the recorded satisfaction. If the assessee disputes that there is an international transaction, object in writing before the reference is made and ask for a speaking order on the objection, which paragraph 3.4 requires.

Where the matter is in set-aside proceedings, read the restoring order with care and identify precisely what was restored and to whom. If the officer proposes to refer a question the appellate authority entrusted to him, say so at the time, citing Bhopal Sugar for the binding character of the direction and Saheli Synthetics and Engineering Professional Co. for the confinement of his powers to the subject matter of the appeal.

Where a treaty question is in issue, keep the Article 5 and Article 7 analysis addressed to the Assessing Officer and insist on his own findings. If the draft order reproduces the transfer pricing order on that question, the objection before the Panel should be framed as an abdication of a non-delegable function rather than as a general complaint about want of application of mind, for the reasons given above.

If the point emerges only later, it is not lost. It is a pure question of law and National Thermal Power permits it to be taken before the Tribunal, provided the facts are on the record, which in this context usually means the reference letter and the two orders.

What is not settled

A reader deciding whether to run this argument is entitled to know where it is strong and where it is not.

It is strong on the requirement that a reference identify the transaction. That follows from the statutory language, from paragraph 3.6 of Instruction No. 3/2016, and now from Ingram Micro.

It is strong on the proposition that the Transfer Pricing Officer cannot decide whether an international transaction exists or whether enterprises are associated. That is High Court authority, in Veer Gems and in Vodafone India Services, and it has not been disturbed.

It is strong on the binding character of a remand direction and the confinement of the Assessing Officer in set-aside proceedings, where the authority runs from Bhopal Sugar through Rajinder Nath to Saheli Synthetics and Engineering Professional Co., although section 286(1) of the 2025 Act now gives the Department something to say about references specifically.

It is strong on the requirement of satisfaction and a hearing before a reference where the jurisdictional fact is disputed, with the qualification that Veer Gems remains unreversed even though the Gujarat High Court itself no longer follows it on that point.

It is weaker, and should be presented as weaker, on the two propositions that carried Ingram Micro. That the Transfer Pricing Officer lacks jurisdiction to determine a permanent establishment rests on Tribunal authority, in Sava Healthcare and now Ingram Micro, with Sava Healthcare under appeal and no High Court decision on it traced. And that an assessment founded on the transfer pricing order without independent examination is bad in law has no traced High Court or Supreme Court authority as a general rule, and cannot be stated as one, because section 92CA(4) and section 166(11) require conformity on the price. Confined to matters outside the price, it is sound. Stated at large, it is not.

On limitation, the position needs stating with more care than it usually receives. Two families of argument have been removed retrospectively: the sixty-day computation under section 92CA(3A), and the interaction of section 144C with section 153 and section 153B. Both removals are subject to the constitutional challenge reported to be pending before the Madras High Court and, on the second, to the undecided reference to a larger bench of the Supreme Court. Neither should be abandoned in a pending matter without considering both, and neither should be relied on as if the amendments had not happened.

But a third limitation argument is not addressed by those amendments at all, and it is the one Ingram Micro was actually pleaded on. Section 153(4) extends the time for completing an assessment by twelve months where a reference under section 92CA(1) is made during the proceeding, and section 286(2) of the 2025 Act carries that extension forward. If the reference was invalid, the extension never operated and the order falls outside time. Nothing in the Finance Act 2026 provisions examined for this article speaks to that chain. The Tribunal in Ingram Micro allowed the jurisdictional premise of the argument and stopped there without deciding the limitation conclusion, so the point stands available and undecided. It is, for the moment, the most valuable thing in this subject, and it is valuable precisely because it is parasitic on the jurisdictional holding rather than independent of it.

Finally, a caution about this article’s own foundations. The Finance Act 2026 provisions have been checked against the Act as published by the Income Tax Department and against the Department’s consolidated text of section 92CA. What has not been closed against a primary record, and is flagged as such where it appears, is the current listing position in the Supreme Court reference in Shelf Drilling, the particulars of the Madras High Court challenge, and the contents of the Tribunal orders of 2026, all of which rest on reports. Anything going into a pleading should be verified from the Act and the law reports.

Key authorities

Proposition	Authority	Level
A Tribunal direction binds the Assessing Officer	Bhopal Sugar Industries Ltd. v. ITO, AIR 1961 SC 182; (1960) 40 ITR 618, decided 2 September 1960	Supreme Court
Orders of higher appellate authorities must be followed; an appeal does not displace them	Union of India v. Kamlakshi Finance Corporation Ltd., AIR 1992 SC 711	Supreme Court
A direction must be express and necessary for the disposal of the case	Rajinder Nath v. CIT, (1979) 120 ITR 14; (1979) 4 SCC 282	Supreme Court
“Thereon” confines jurisdiction to the subject matter of the appeal	Hukumchand Mills Ltd. v. CIT, AIR 1967 SC 455; (1967) 63 ITR 232	Supreme Court
A finding means one necessary for the disposal of the appeal, not an incidental one	ITO v. Murlidhar Bhagwan Das, (1964) 52 ITR 335, restated in CIT v. Mohd. Shakoor Mohd. Bashir, AIR 1973 SC 2359	Supreme Court
A pure question of law may be raised for the first time before the Tribunal	National Thermal Power Co. Ltd. v. CIT, (1998) 229 ITR 383, decided 4 December 1996	Supreme Court
The first appellate authority’s power is co-terminus with the Assessing Officer’s	Jute Corporation of India Ltd. v. CIT, (1991) 187 ITR 688	Supreme Court
A mandatory reference not made makes the adjustment, not the assessment, bad	PCIT v. S.G. Asia Holding (I) Pvt. Ltd., (2019) 108 taxmann.com 213, decided 13 August 2019	Supreme Court
Where the associated enterprise is remunerated at arm’s length, no further profits need be attributed to the permanent establishment	DIT v. Morgan Stanley and Co. Inc., (2007) 292 ITR 416	Supreme Court
A retrospective amendment can make an earlier order a mistake apparent from the record	M.K. Venkatachalam v. V.O. Bombay Dyeing and Manufacturing Co. Ltd., (1958) 34 ITR 143; see also ACIT v. Saurashtra Kutch Stock Exchange Ltd., (2008) 305 ITR 227	Supreme Court
A set-aside cannot expand the Assessing Officer’s powers beyond the subject matter of appeal	Saheli Synthetics (P) Ltd. v. CIT, (2008) 302 ITR 126	Gujarat High Court
An Assessing Officer who goes beyond what was restored acts without jurisdiction	Engineering Professional Co. Pvt. Ltd. v. Dy. CIT, (2020) 424 ITR 253	Gujarat High Court
The Transfer Pricing Officer cannot decide whether an international transaction exists	Veer Gems v. ACIT, (2013) 351 ITR 35	Gujarat High Court
A hearing is required before a reference where the jurisdictional fact is disputed	Hitachi Hi Rel Power Electronics Pvt. Ltd. v. DCIT, SCA 23302 of 2019, (2021) 282 Taxman 520; 205 DTR 201	Gujarat High Court
A reference without a speaking order on the objection is bad	Alpha Nipon Innovatives Ltd. v. DCIT, (2016) 76 taxmann.com 166	Gujarat High Court
A personal hearing is read into section 92CA(1); the officer is bound by the Assessing Officer’s opinion	Vodafone India Services Pvt. Ltd. v. Union of India, (2014) 361 ITR 531	Bombay High Court
Satisfaction and a hearing are required; Instruction No. 3/2016 is clarificatory	Indorama Synthetics (India) Ltd. v. Addl. CIT, [2016] 71 taxmann.com 349	Delhi High Court
The transaction must be taken as found; no recharacterisation	CIT v. EKL Appliances Ltd., (2012) 345 ITR 241	Delhi High Court
The officer is confined to the arm’s length price; the Assessing Officer retains a genuineness inquiry	CIT v. Cushman and Wakefield (India) Pvt. Ltd., (2014) 367 ITR 730	Delhi High Court
A transfer pricing order does not foreclose the Assessing Officer’s permanent establishment inquiry	LG Electronics Inc. v. ADIT, Civil Misc. Writ Petition (Tax) No. 1366 of 2012 and connected petitions, decided 5 August 2014	Allahabad High Court
No interest under section 234B where the payer was obliged to deduct tax at source and did not	DIT (International Taxation) v. NGC Network Asia LLC, (2009) 313 ITR 187	Bombay High Court
The sixty-day period under section 92CA(3A) is mandatory, now displaced prospectively and retrospectively by section 92CA(3AA)	DCIT v. Saint Gobain India Pvt. Ltd., decided 31 March 2022	Madras High Court
The Transfer Pricing Officer cannot assume functions entrusted to the Assessing Officer	Sava Healthcare Ltd. v. ACIT, (2019) 107 taxmann.com 226	Tribunal, Pune
A reference must identify the transaction; the officer cannot decide permanent establishment or treaty taxability	Ingram Micro (India) Exports Pte. Ltd. v. DCIT, ITA 1746/Mum/2016, 15 September 2026	Tribunal, Mumbai

Primary sources

• Income Tax Department, consolidated text of section 92CA, 2026 edition
• Income Tax Department, consolidated text of section 144C, 2025 edition; the Finance Act 2026 insertions discussed above are not yet carried into that consolidation
• The Finance Act 2026, Act No. 4 of 2026, as published by the Department

The order discussed in this article is hosted here: Ingram Micro (India) Exports Pte. Ltd. v. DCIT, ITAT Mumbai, ITA 1746/Mum/2016 with CO 70/Mum/2017, pronounced 15 September 2026.

Related reading on this site: section 92CA and references to the Transfer Pricing Officer, section 144C and the Dispute Resolution Panel, and section 153 and limitation.

This note is general commentary on the law as at 10 October 2026 and is not advice on any matter. The position in a particular case depends on its own facts.