Section 92CA — Section 92CA — Reference to Transfer…

STATUTORY ARCHITECTURE — 18-ROW MAP

Statutory text — Income-tax Act, 1961

Reference to Transfer Pricing Officer.

92CA. (1) Where any person, being the assessee, has entered into an international transaction or specified

domestic transaction in any previous year, and the Assessing Officer considers it necessary or expedient so

to do, he may, with the previous approval of the Principal Commissioner or Commissioner, refer the

computation of the arm's length price in relation to the said international transaction or specified domestic

transaction under section 92C to the Transfer Pricing Officer.

Following provisos shall be inserted in sub-section (1) of section 92CA by the Finance Act, 2025, w.e.f.

1-4-2026:

Provided that no reference for computation of the arm's length price in relation to an international

transaction or a specified domestic transaction shall be made, if the Transfer Pricing Officer has declared

that option exercised by the assessee in sub-section (3B) in relation to such transaction is valid for such

previous year:

Provided further that if any reference for an international transaction or a specified domestic

transaction, in respect of a previous year, for which the option is declared valid under sub-section (3B) is

made before or after such declaration by the Transfer Pricing Officer, the provisions of this sub-section

shall have the effect as if no reference is made for such transaction.

(2) Where a reference is made under sub-section (1), the Transfer Pricing Officer shall serve a notice on the

assessee requiring him to produce or cause to be produced on a date to be specified therein, any evidence on

which the assessee may rely in support of the computation made by him of the arm's length price in relation

to the international transaction or specified domestic transaction referred to in sub-section (1).

(2A) Where ⁶[any other international transaction or specified domestic transaction [other than an

international transaction or a specified domestic transaction]referred under sub-section (1)], comes to the

notice of the Transfer Pricing Officer during the course of the proceedings before him, the provisions of this

Chapter shall apply as ⁷[if such other international transaction or a specified domestic transaction is an

international transaction or a specified domestic transaction]referred to him under sub-section (1).

(2B) Where in respect of an international transaction ⁸[or a specified domestic transaction], the assessee

has not furnished the report under section 92E and such transaction comes to the notice of the Transfer

Pricing Officer during the course of the proceeding before him, the provisions of this Chapter shall apply as

if ⁹[such transaction is an international transaction or a specified domestic transaction]referred to him

under sub-section (1).

(2C) Nothing contained in sub-section (2B) shall empower the Assessing Officer either to assess or reassess

under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise

increasing the liability of the assessee under section 154, for any assessment year, proceedings for which

have been completed before the 1st day of July, 2012.

(3) On the date specified in the notice under sub-section (2), or as soon thereafter as may be, after hearing

such evidence as the assessee may produce, including any information or documents referred to in

sub-section (3) of section 92D and after considering such evidence as the Transfer Pricing Officer may

require on any specified points and after taking into account all relevant materials which he has gathered,

the Transfer Pricing Officer shall, by order in writing, determine the arm's length price in relation to the

international transaction or specified domestic transaction in accordance with sub-section (3) of section 92C

and send a copy of his order to the Assessing Officer and to the assessee.

(3A) Where a reference was made under sub-section (1) before the 1st day of June, 2007 but the order

under sub-section (3) has not been made by the Transfer Pricing Officer before the said date, or a reference

under sub-section (1) is made on or after the 1st day of June, 2007, an order under sub-section (3) may be

made at any time before sixty days prior to the date on which the period of limitation referred to in section

153, or as the case may be, in section 153B for making the order of assessment or reassessment or

recomputation or fresh assessment, as the case may be, expires:

Provided that in the circumstances referred to in clause (ii) or clause (x) of Explanation 1 to section 153, if

the period of limitation available to the Transfer Pricing Officer for making an order is less than sixty days,

such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed

to have been extended accordingly.

Following sub-section (3B) shall be inserted after sub-section (3A) of section 92CA by the Finance Act,

2025, w.e.f. 1-4-2026:

(3B) The arm's length price, being determined in relation to the international transaction or the specified

domestic transaction under sub-section (3) for any previous year shall apply to similar international

transaction or specified domestic transaction for the two consecutive previous years immediately

following such previous year, on fulfilment of the following conditions, namely:—

(a) the assessee exercises an option or options to the above effect for the said two consecutive

previous years;

(b) such option or options are exercised in such form, manner and within such period as prescribed;

and

(c) the Transfer Pricing Officer shall, within one month from the end of the month in which such

option or options are exercised, by an order in writing, declare that such option or options are

valid subject to the conditions, as prescribed:

Providedthat the provisions of this sub-section shall not apply to any proceedings under Chapter XIV-B.

(4) On receipt of the order under sub-section (3), the Assessing Officer shall proceed to compute the total

income of the assessee under sub-section (4) of section 92C in conformity with the arm's length price as so

determined by the Transfer Pricing Officer.

Following sub-section (4A) shall be inserted after sub-section (4) of section 92CA by the Finance Act,

2025, w.e.f. 1-4-2026:

(4A) Notwithstanding anything contained in sub-section (4), where the Transfer Pricing Officer has

declared an option exercised by the assessee as valid option under sub-section (3B), he shall examine and

determine the arm's length price in relation to such similar transaction for two consecutive previous years

immediately following such previous year, in the order referred to in sub-section (3) and on receipt of such

order, the Assessing Officer shall proceed to recompute the total income of the assessee for the said two

consecutive previous years as per the provisions of sub-section (21) of section 155.

(5) With a view to rectifying any mistake apparent from the record, the Transfer Pricing Officer may amend

any order passed by him under sub-section (3), and the provisions of section 154 shall, so far as may be,

apply accordingly.

(6) Where any amendment is made by the Transfer Pricing Officer under sub-section (5), he shall send a

copy of his order to the Assessing Officer who shall thereafter proceed to amend the order of assessment in

conformity with such order of the Transfer Pricing Officer.

(7) The Transfer Pricing Officer may, for the purposes of determining the arm's length price under this

section, exercise all or any of the powers specified in clauses (a) to (d) of sub-section (1) of section 131 or

sub-section (6) of section 133 or section 133A.

(8) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of

determination of the arm's length price under sub-section (3), so as to impart greater efficiency, transparency

and accountability by—

(a) eliminating the interface between the Transfer Pricing Officer and the assessee or any other person

to the extent technologically feasible;

(b) optimising utilisation of the resources through economies of scale and functional specialisation;

(c) introducing a team-based determination of arm's length price with dynamic jurisdiction.

(9) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (8),

by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall

apply with such exceptions, modifications and adaptations as may be specified in the notification.

¹⁰[***]

(10) Every notification issued under sub-section (8) and sub-section (9) shall, as soon as may be after the

notification is issued, be laid before each House of Parliament.

Following sub-sections (11) and (12) shall be inserted after sub-section (10) of section 92CA by the

Finance Act, 2025, w.e.f. 1-4-2026:

(11) If any difficulty arises in giving effect to the provisions of sub-sections (3B) and (4A), the Board may,

with the previous approval of the Central Government, issue guidelines for the purpose of removing such

difficulty:

Provided that no such guideline shall be made after the expiration of two years from the 1st April, 2026.

(12) Every guideline issued by the Board under sub-section (11) shall be laid before each House of

Parliament while it is in session for a total period of thirty days which may be comprised in one session or

in two or more successive sessions, and if, before the expiry of the session immediately following the

session or the successive sessions aforesaid, both houses agree in making any modification in such

guideline or both Houses agree that the guideline, should not be issued, the guideline shall thereafter have

effect only in such modified form or be of no effect, as the case may be; so, however, that any such

modification or annulment shall be without prejudice to the validity of anything previously done under that

guideline.

Explanation.—For the purposes of this section, "Transfer Pricing Officer" means a Joint Commissioner or

Deputy Commissioner or Assistant Commissioner authorised by the Board to perform all or any of the

functions of an Assessing Officer specified in sections 92C and 92D in respect of any person or class of

persons.

Notes

6. Sub. for "any other international transaction [other than an international transaction" by Act No. 15 of 2024, w.e.f. 1-4-2025.

7. Sub. for "if such other international transaction is an international transaction" by Act No. 15 of 2024, w.e.f. 1-4-2025.

8. Ins. by Act No. 15 of 2024, w.e.f. 1-4-2025.

9. Sub. for "such transaction is an international transaction" by Act No. 15 of 2024, w.e.f. 1-4-2025.

10. Proviso omtt. by Act No. 07 of 2025, w.e.f. 1-4-2025. Prior to its omission, proviso, as amended by Act No. 06 of 2022, w.e.f. 1-4-2022 and Act No. 08 of 2024, w.e.f. 1-4-2024, read as under: "Provided that no direction shall be issued after the 31st day of March, 2025."

Function in the statutory architecture

Section 92CA lets the Assessing Officer, with the previous approval of the Principal Commissioner or Commissioner, refer the computation of the arm's length price of an international or specified domestic transaction to the Transfer Pricing Officer where he finds it necessary or expedient. The Transfer Pricing Officer issues notice, hears the evidence, may also take up other transactions that come to his notice and transactions not reported under s. 92E, and passes a written order under s. 92C(3). Under sub-section (3A), the order may be made at any time before sixty days prior to the date on which the limitation under s. 153 or s. 153B expires.

Insertions noted in the text as made "by the Finance Act, 2025, w.e.f. 1-4-2026" add sub-section (3B): the arm's length price so determined applies to similar transactions of the two following previous years if the assessee exercises the prescribed option and the Transfer Pricing Officer declares it valid within one month. No reference is then made for those years, and sub-section (4A) provides for recomputation under s. 155(21). Sub-section (3B) does not apply to proceedings under Chapter XIV-B.

Operative consequences

The Transfer Pricing Officer may rectify his order, with the assessment amended to match (sub-sections (5), (6)), and may use the powers in s. 131(1)(a) to (d), s. 133(6) and s. 133A (sub-section (7)).
On receiving the order, the Assessing Officer computes total income in conformity with it (sub-section (4)).
The Board may issue guidelines on sub-sections (3B) and (4A), but not after two years from 1 April 2026 (sub-section (11)).

Status

Operative for assessment year 2026-27. The Finance Act, 2026 (section 4) inserts sub-section (3AA), deemed to have been inserted with effect from 1 June 2007. Notwithstanding any judgment or decree, it fixes how the sixty days are counted: where the limitation expires on 31 March, the order may be made up to 30 January (31 January in a leap year); where it expires on 31 December, up to 1 November.

The 1961 Act governs assessment year 2026-27 and earlier years; the Income-tax Act, 2025 governs tax year 2026-27 onwards, and for this subject the 2025 Act provision is s. 166. The Finance Act, 2026 substituted s. 166(7) of the 2025 Act: there the order is due by 31 January (limitation ending 31 March) or 31 October (ending 31 December).

Case Laws & Commentary

SECTION 92CA — REFERENCE TO TRANSFER PRICING OFFICER

Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)

A. SECTION COMMENTARY

A.1 Structural position & legislative purpose

Section 92CA provides the procedural mechanism by which the Assessing Officer (AO), with the prior approval of the Principal Commissioner/Commissioner, refers the computation of the ALP of an international transaction or SDT to a Transfer Pricing Officer (TPO). The TPO is a specialised officer (a Joint/Deputy/Assistant Commissioner authorised by the Board) who determines the ALP after hearing the assessee and gathering material, including by exercising the powers of survey and of summoning/discovery.

Two features dominate the section's jurisprudence. First, since the Finance Act, 2007 (w.e.f. 1-6-2007), the AO is bound to compute the total income in conformity with the ALP determined by the TPO — sub-section (4) makes the TPO's order binding on the AO, removing the earlier discretion. Second, sub-section (2A)/(2B) (FA 2011/2012) empower the TPO to examine even transactions not specifically referred (and transactions not reported), subject to limitation. Sub-section (3A) sets the limitation for the TPO's order (60 days before the date on which the limitation under s.153/153B for the assessment expires).

A.2 Sub-section / clause taxonomy

Sub-section (1): Where the assessee has entered into an international transaction or SDT in any previous year, the AO may, with the previous approval of the PCIT/CIT, refer the computation of the ALP to the TPO if he considers it necessary or expedient.

Sub-section (2): The TPO serves notice on the assessee requiring it to produce evidence in support of the computation of the ALP.

Sub-section (2A)/(2B): The TPO may determine the ALP of any international transaction which comes to his notice during the proceedings though not referred by the AO (2A), and of a transaction in respect of which the assessee has not furnished the report under s.92E (2B).

Sub-section (3): The TPO, after hearing/considering evidence and material gathered (including under the powers in sub-section (7)), passes an order in writing determining the ALP and sends a copy to the AO and the assessee.

Sub-section (3A): Time limit — the TPO's order must be passed at least 60 days before the date on which the limitation period under s.153/153B for completing the assessment expires.

Sub-section (4): On receipt of the TPO's order, the AO shall proceed to compute the total income in conformity with the ALP determined by the TPO (binding effect, FA 2007).

Sub-section (7): The TPO has, for the purpose of determining the ALP, the powers under ss.131(1)(a)-(d), 133(6) and 133A (survey).

A.3 Core doctrinal themes

Theme (1) — Binding effect of the TPO's order on the AO (post-FA 2007): the AO cannot deviate from the ALP determined by the TPO; this is now statutory (sub-section (4)).

Theme (2) — Limitation / barred orders: a TPO order or a consequent assessment passed beyond the s.92CA(3A)/153 limitation is void; the 60-day computation has generated litigation on the exact terminal date; sub-section (3AA), inserted by the Finance Act, 2026 with effect from 1-6-2007, now fixes that computation notwithstanding any judgment, order or decree of any court.

Theme (3) — Reference must precede determination; valid reference and PCIT approval are jurisdictional. The TPO's suo motu power (2A) is confined to transactions coming to notice during proceedings.

Theme (4) — Interaction with the DRP (s.144C): where a TP adjustment is proposed, the AO must pass a draft order and the eligible assessee may approach the Dispute Resolution Panel before a final order.

A.4 Legislative evolution / Finance Act amendment trail

FA 2002 (w.e.f. 1-6-2002): Section 92CA inserted to provide for reference to the TPO.

FA 2007 (w.e.f. 1-6-2007): Sub-section (4) amended to make the TPO's ALP determination binding on the AO.

FA 2011 (w.e.f. 1-6-2011): Sub-section (2A) inserted — TPO empowered to consider transactions noticed but not referred; survey power (s.133A) added in sub-section (7).

FA 2012 (w.e.f. 1-7-2012): Sub-section (2B) inserted — TPO may examine unreported transactions; extension to SDTs.

FA 2014/2016/2020: Limitation alignment with s.153; faceless scheme enabling provisions.

FA 2025 (w.e.f. 1-4-2026): Provisos to sub-section (1) and sub-sections (3B) and (4A) inserted — on a valid option, the ALP determined for a previous year applies to similar transactions for the two consecutive previous years immediately following.

FA 2026: Section 4 inserts sub-section (3AA), deemed inserted w.e.f. 1-6-2007, fixing the calculation of the sixty days for an order under sub-section (3) notwithstanding any judgment, order or decree of any court.

A.5 CA practitioner pointers

(1) Check the foundational validity of the reference — was PCIT/CIT approval obtained, and did the AO record satisfaction? A defective reference can vitiate the TPO order.

(2) Compute the s.92CA(3A)/153 limitation carefully; a time-barred TPO order or assessment is a complete defence.

(3) Use the s.144C DRP route for proposed TP adjustments — file objections within 30 days of the draft order; the DRP's directions bind the AO.

(4) Where the TPO travels into transactions not referred, examine whether they 'came to his notice during proceedings' (2A) — a precondition for the suo motu power.

B. FA 2026 IMPACT NOTE

Section 4 of the Finance Act, 2026 inserts sub-section (3AA) in s.92CA, deemed to have been inserted w.e.f. 1-6-2007. Notwithstanding any judgment, order or decree of any court, the sixty days for an order under sub-section (3) are calculated so that, where the period of limitation expires on 31 March, the order may be made up to 30 January (31 January in a leap year), and where it expires on 31 December, up to 1 November. The reference mechanism and the binding effect of the TPO's order otherwise continue up to AY 2026-27.

Note on disambiguation: the multi-year ALP option is not confined to the 2025 Act. The Finance Act, 2025 inserted provisos to sub-section (1) and sub-sections (3B) and (4A) of s.92CA w.e.f. 1-4-2026, under which the ALP determined for a previous year applies, on a valid option, to similar transactions for the two consecutive previous years immediately following. Subject to these provisions and sub-section (3AA), the position below is unchanged.

C. CASE LAW — CLUSTERED BY ISSUE

Section 92CA litigation is predominantly procedural — validity of reference, binding effect, and limitation. The leading authority on the limitation computation is set out below; the reviewability principle of SAP Labs (SC) equally governs the TPO's substantive ALP determination.

Cluster C-1 : Limitation for the TPO's order

1. Pfizer Healthcare India (P) Ltd. v. JCIT (2021) 433 ITR 28 (Madras)

Facts: The TPO passed the order determining the ALP on the 60th day (or after) reckoned from the date on which the s.153 limitation for the assessment expired. The assessee challenged the order as time-barred under s.92CA(3A).

Issue: How the '60 days' in s.92CA(3A) is to be computed — whether the TPO's order must be passed before the 60th day prior to the s.153 limitation date.

Held: The Madras High Court (Division Bench) held that the period of 60 days under s.92CA(3A) is to be computed by excluding the last date of the limitation under s.153 and counting 60 days backwards; the TPO's order must be passed on or before the 60th day so computed. Orders passed beyond that date are barred by limitation and void.

Ratio: The s.92CA(3A) 60-day limit is mandatory; a late TPO order is without jurisdiction and cannot found a TP adjustment.

Relevance: Leading authority on TPO-order limitation; widely applied to quash time-barred adjustments.

Cluster C-2 : Reviewability of the TPO's ALP determination

2. SAP Labs India (P) Ltd. v. ITO (2023) 454 ITR 121 (SC)

Facts: See s.92 Cluster C-2 — concerning whether the ALP determined through the TPO/ITAT process can be scrutinised by the High Court.

Issue: Whether ALP determinations emanating from the TPO reference are immune from s.260A scrutiny.

Held: The Supreme Court held that ALP determinations (including the comparability and method analysis underlying a TPO order ultimately tested by the ITAT) are examinable by the High Court for conformity with Chapter X and the Rules.

Ratio: No part of the s.92CA process is beyond judicial review where the statutory method is not followed or the finding is perverse.

Relevance: Governs the appellate scrutiny of TPO-driven adjustments.

D. PRACTITIONER'S NOTE

Procedural defence map: (1) verify PCIT/CIT approval and the AO's recorded satisfaction for the reference; (2) test the TPO order against the s.92CA(3A) 60-day limit (Pfizer Healthcare) and the s.153 outer limit; (3) ensure a draft order and DRP opportunity under s.144C before the final order; (4) on merits, challenge comparability/method under SAP Labs.

Where a TPO has examined unreferred transactions, scrutinise compliance with sub-section (2A)/(2B) (the transaction must have come to notice during proceedings / be an unreported transaction).

Caveat: This material is treatise-style commentary for practitioners and academic use. It is not legal opinion. Verify the current text, the latest CBDT circulars/notifications and the most recent appellate position before relying on any proposition in assessment, audit (Form 3CEB) or litigation.

Case law on Section 92CA

ITAT, High Court and Supreme Court judgments applying this section, on BharatTax.net, our income tax case law search.

← All sections (940)Act 1961 hub

Income-tax Act, 1961	Income-tax Act, 2025
s. 92CA(1) and provisos — reference to the Transfer Pricing Officer; no reference where a multi-year option is valid	s. 166(1) to (3)
s. 92CA(2) to (3A), (3AA) — notice, other transactions, order and time limit	s. 166(4) to (8)
s. 92CA(3B), (4), (4A) — application to two following years; computation by the Assessing Officer	s. 166(9) to (12)
s. 92CA(5) to (7), (11), (12) and Explanation — rectification, powers, guidelines, definition	s. 166(13) to (17)
s. 92CA(8) to (10) — faceless scheme	s. 532 (general scheme power)

Section 92CA — Reference to Transfer Pricing Officer (TPO)

Case Laws & Commentary

Case law on Section 92CA