CHAPTER X — SPECIAL PROVISIONS RELATING TO AVOIDANCE OF TAX
Case Laws & Commentary
SECTION 92D — MAINTENANCE, KEEPING AND FURNISHING OF INFORMATION AND DOCUMENT BY CERTAIN PERSONS
Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)
A. SECTION COMMENTARY
A.1 Structural position & legislative purpose
Section 92D imposes the documentation backbone of the TP regime. Sub-section (1) requires every person who has entered into an international transaction or SDT to keep and maintain the information and documents prescribed by Rule 10D (the local TP documentation). It also requires a 'constituent entity' of an 'international group' to keep and maintain the information and documents specified in Rule 10DA — the MASTER FILE — and to furnish it (Form 3CEAA), giving effect to BEPS Action 13. Sub-section (3) empowers the AO/TPO to require production of the prescribed documentation within the time allowed (extendable), and sub-section (4) (FA 2016) requires the constituent entity to furnish the master-file information to the prescribed authority within the prescribed period.
The documentation must be contemporaneous and retained for the prescribed period (generally eight years from the end of the relevant assessment year under Rule 10D(5)). Failure attracts penalties — s.271AA (2% of the value of each international transaction/SDT for failure to keep/maintain or report, or for maintaining/furnishing incorrect information) and s.271G (penalty for failure to furnish documentation called for under s.92D(3)).
A.2 Sub-section / clause taxonomy
Sub-section (1): Every person who has entered into an international transaction or SDT shall keep and maintain such information and documents as prescribed (Rule 10D); and a constituent entity of an international group shall keep and maintain the information/documents specified by Rule 10DA (master file) and furnish them.
Sub-section (2): Without prejudice to (1), the Board may prescribe the period for which the information/documents are to be kept and maintained (Rule 10D(5) — generally eight years).
Sub-section (3): The AO or the Commissioner (Appeals) may, in the course of any proceeding, require any person who has entered into an international transaction or SDT to furnish the prescribed information/documents within thirty days of receipt of notice (extendable by up to thirty days).
Sub-section (4) [FA 2016]: The constituent entity of an international group shall furnish the information and documents (master file) to the prescribed authority within the prescribed period (Form 3CEAA).
A.3 Core doctrinal themes
Theme (1) — Contemporaneous documentation: Rule 10D documentation must be maintained as the transactions occur; reconstructing it post-facto undermines its evidentiary value and invites s.271AA exposure.
Theme (2) — Three-tier BEPS documentation: local file (Rule 10D), master file (Rule 10DA / Form 3CEAA), and country-by-country report (s.286 / Form 3CEAD) — s.92D(1)/(4) anchors the first two tiers for constituent entities.
Theme (3) — Penalty interface: s.271G (failure to furnish on s.92D(3) notice) and s.271AA (failure to maintain/report) are the enforcement teeth; reasonable cause (s.273B) is the principal defence.
Theme (4) — Reasonableness of demands: where documentation called for is impossible or unreasonable (e.g. segmental data not maintained in the ordinary course), tribunals have deleted s.271G penalties on reasonable-cause grounds.
FA 2001 (w.e.f. 1-4-2002): Section 92D inserted with Rule 10D documentation.
FA 2012: Extension to SDTs.
FA 2016 (w.e.f. 1-4-2017): Sub-section (4) and the master-file/CbCR architecture (Rule 10DA, s.286) introduced, implementing BEPS Action 13.
FA 2026: No amendment to s.92D; documentation framework preserved.
A.5 CA practitioner pointers
(1) Maintain contemporaneous Rule 10D documentation for every reportable transaction; calendar the eight-year retention (Rule 10D(5)).
(2) Determine master-file applicability (Rule 10DA thresholds) and file Form 3CEAA / Part A intimation in time; coordinate with CbCR (s.286) where the group crosses the consolidated-revenue threshold.
(3) Respond to s.92D(3) notices within 30 days (seek the 30-day extension if needed); where data sought is not maintained in the ordinary course, build the reasonable-cause record early to defend against s.271G.
B. FA 2026 IMPACT NOTE
Section 92D is NOT amended by the Finance Act, 2026. The local-file (Rule 10D), master-file (Rule 10DA) and production-notice machinery continue for AY 2026-27 onward.
No FA 2026 change to the documentation thresholds or retention period; the BEPS three-tier framework remains in force.
C. CASE LAW — CLUSTERED BY ISSUE
Section 92D litigation is concentrated on the PENALTY consequences of non-compliance — principally s.271G (failure to furnish documents called for under s.92D(3)). The verified, on-point authorities below address reasonable cause and the bounds of a documentation demand.
Cluster C-1 : Penalty under s.271G for failure to furnish documentation — reasonable cause
1. s.271G penalty line — failure to furnish data not maintained in the ordinary course
Facts: The TPO levied penalty under s.271G for the assessee's failure to furnish certain documents/segmental information called for under s.92D(3), which the assessee did not maintain in the ordinary course of business or could not produce in the form demanded (e.g. transaction-wise segmental profitability for a diamond trader).
Issue: Whether penalty under s.271G is leviable where the assessee maintained Rule 10D documentation but could not furnish specific additional data not ordinarily maintained.
Held: Tribunals (e.g. the Mumbai benches in the diamond-trade s.271G line) have consistently held that s.271G penalty is not automatic; where the assessee substantially complied with Rule 10D and the non-furnished item was not maintainable in the ordinary course or the demand was unreasonable, reasonable cause under s.273B is made out and the penalty is deleted.
Ratio: s.271G is subject to the reasonable-cause defence (s.273B); a demand for data not maintained in the ordinary course cannot, by itself, found a penalty.
Relevance: Representative of the consistent tribunal approach protecting bona fide documentation compliance; cite where the Revenue seeks s.271G penalty for non-maintainable data.
Facts: Penalty under s.271G was levied on the footing that the assessee had failed to benchmark its international (and specified domestic) transactions, rather than for failing to furnish any specified document or information called for under s.92D(3).
Issue: Whether penalty under s.271G can be imposed for failure to benchmark transactions, and whether the Revenue must specify the particular documents/information not submitted.
Held: The Delhi High Court held that s.271G penalty can be levied only for failure to furnish the information or documents required under s.92D(3) — not for an alleged failure to benchmark the international/specified domestic transactions. Before imposing the penalty, the Revenue must specify which documents or information were not submitted; a penalty founded on inadequate benchmarking is impermissible.
Ratio: s.271G is confined to non-furnishing of called-for documents/information; it cannot be used to penalise the quality or absence of benchmarking, and the Revenue must identify the specific non-furnished items.
Relevance: Leading Delhi High Court authority delimiting s.271G; directly defeats penalties premised on benchmarking failure rather than non-production of documents.
D. PRACTITIONER'S NOTE
Documentation governance: (1) prepare the Rule 10D local file contemporaneously; (2) assess master-file (Rule 10DA) and CbCR (s.286) obligations against the thresholds and file the relevant Forms (3CEAA/3CEAB/3CEAD) on time; (3) respond to s.92D(3) notices within the statutory window; (4) where specific data is not maintained in the ordinary course, document the reason promptly to support a s.273B reasonable-cause defence against s.271G.
Penalty strategy: treat s.271AA (maintenance/reporting) and s.271G (production) separately; for both, the reasonable-cause defence (s.273B) is decisive — build the record of bona fide compliance before the penalty stage.
E. SOURCES & CITATIONS
Statutory text verified against the Income-tax Act, 1961 (Bare Act, as amended by the Finance Act, 2025), cross-checked for FA 2026 against the firm's '00 Finance Act 2026 Amendment Tracker.xlsx'. Marginal headings reproduced verbatim from the Gazette text.
Case citations verified against publicly reported sources (ITR / Taxman / itatonline.org / Indian Kanoon / official High Court and Supreme Court records). Only decisions actually on point for this section's substantive law are listed; no citation has been invented or paraphrased into existence.
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 Laws & Commentary
SECTION 92D — MAINTENANCE, KEEPING AND FURNISHING OF INFORMATION AND DOCUMENT BY CERTAIN PERSONS
Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)
A. SECTION COMMENTARY
A.1 Structural position & legislative purpose
Section 92D imposes the documentation backbone of the TP regime. Sub-section (1) requires every person who has entered into an international transaction or SDT to keep and maintain the information and documents prescribed by Rule 10D (the local TP documentation). It also requires a 'constituent entity' of an 'international group' to keep and maintain the information and documents specified in Rule 10DA — the MASTER FILE — and to furnish it (Form 3CEAA), giving effect to BEPS Action 13. Sub-section (3) empowers the AO/TPO to require production of the prescribed documentation within the time allowed (extendable), and sub-section (4) (FA 2016) requires the constituent entity to furnish the master-file information to the prescribed authority within the prescribed period.
The documentation must be contemporaneous and retained for the prescribed period (generally eight years from the end of the relevant assessment year under Rule 10D(5)). Failure attracts penalties — s.271AA (2% of the value of each international transaction/SDT for failure to keep/maintain or report, or for maintaining/furnishing incorrect information) and s.271G (penalty for failure to furnish documentation called for under s.92D(3)).
A.2 Sub-section / clause taxonomy
Sub-section (1): Every person who has entered into an international transaction or SDT shall keep and maintain such information and documents as prescribed (Rule 10D); and a constituent entity of an international group shall keep and maintain the information/documents specified by Rule 10DA (master file) and furnish them.
Sub-section (2): Without prejudice to (1), the Board may prescribe the period for which the information/documents are to be kept and maintained (Rule 10D(5) — generally eight years).
Sub-section (3): The AO or the Commissioner (Appeals) may, in the course of any proceeding, require any person who has entered into an international transaction or SDT to furnish the prescribed information/documents within thirty days of receipt of notice (extendable by up to thirty days).
Sub-section (4) [FA 2016]: The constituent entity of an international group shall furnish the information and documents (master file) to the prescribed authority within the prescribed period (Form 3CEAA).
A.3 Core doctrinal themes
Theme (1) — Contemporaneous documentation: Rule 10D documentation must be maintained as the transactions occur; reconstructing it post-facto undermines its evidentiary value and invites s.271AA exposure.
Theme (2) — Three-tier BEPS documentation: local file (Rule 10D), master file (Rule 10DA / Form 3CEAA), and country-by-country report (s.286 / Form 3CEAD) — s.92D(1)/(4) anchors the first two tiers for constituent entities.
Theme (3) — Penalty interface: s.271G (failure to furnish on s.92D(3) notice) and s.271AA (failure to maintain/report) are the enforcement teeth; reasonable cause (s.273B) is the principal defence.
Theme (4) — Reasonableness of demands: where documentation called for is impossible or unreasonable (e.g. segmental data not maintained in the ordinary course), tribunals have deleted s.271G penalties on reasonable-cause grounds.
A.4 Legislative evolution / Finance Act amendment trail
FA 2001 (w.e.f. 1-4-2002): Section 92D inserted with Rule 10D documentation.
FA 2012: Extension to SDTs.
FA 2016 (w.e.f. 1-4-2017): Sub-section (4) and the master-file/CbCR architecture (Rule 10DA, s.286) introduced, implementing BEPS Action 13.
FA 2026: No amendment to s.92D; documentation framework preserved.
A.5 CA practitioner pointers
(1) Maintain contemporaneous Rule 10D documentation for every reportable transaction; calendar the eight-year retention (Rule 10D(5)).
(2) Determine master-file applicability (Rule 10DA thresholds) and file Form 3CEAA / Part A intimation in time; coordinate with CbCR (s.286) where the group crosses the consolidated-revenue threshold.
(3) Respond to s.92D(3) notices within 30 days (seek the 30-day extension if needed); where data sought is not maintained in the ordinary course, build the reasonable-cause record early to defend against s.271G.
B. FA 2026 IMPACT NOTE
Section 92D is NOT amended by the Finance Act, 2026. The local-file (Rule 10D), master-file (Rule 10DA) and production-notice machinery continue for AY 2026-27 onward.
No FA 2026 change to the documentation thresholds or retention period; the BEPS three-tier framework remains in force.
C. CASE LAW — CLUSTERED BY ISSUE
Section 92D litigation is concentrated on the PENALTY consequences of non-compliance — principally s.271G (failure to furnish documents called for under s.92D(3)). The verified, on-point authorities below address reasonable cause and the bounds of a documentation demand.
Cluster C-1 : Penalty under s.271G for failure to furnish documentation — reasonable cause
1. s.271G penalty line — failure to furnish data not maintained in the ordinary course
Facts: The TPO levied penalty under s.271G for the assessee's failure to furnish certain documents/segmental information called for under s.92D(3), which the assessee did not maintain in the ordinary course of business or could not produce in the form demanded (e.g. transaction-wise segmental profitability for a diamond trader).
Issue: Whether penalty under s.271G is leviable where the assessee maintained Rule 10D documentation but could not furnish specific additional data not ordinarily maintained.
Held: Tribunals (e.g. the Mumbai benches in the diamond-trade s.271G line) have consistently held that s.271G penalty is not automatic; where the assessee substantially complied with Rule 10D and the non-furnished item was not maintainable in the ordinary course or the demand was unreasonable, reasonable cause under s.273B is made out and the penalty is deleted.
Ratio: s.271G is subject to the reasonable-cause defence (s.273B); a demand for data not maintained in the ordinary course cannot, by itself, found a penalty.
Relevance: Representative of the consistent tribunal approach protecting bona fide documentation compliance; cite where the Revenue seeks s.271G penalty for non-maintainable data.
2. CIT v. Leroy Somer & Controls (India) (P) Ltd. (2014) 360 ITR 532 / 37 taxmann.com 407 (Delhi)
Facts: Penalty under s.271G was levied on the footing that the assessee had failed to benchmark its international (and specified domestic) transactions, rather than for failing to furnish any specified document or information called for under s.92D(3).
Issue: Whether penalty under s.271G can be imposed for failure to benchmark transactions, and whether the Revenue must specify the particular documents/information not submitted.
Held: The Delhi High Court held that s.271G penalty can be levied only for failure to furnish the information or documents required under s.92D(3) — not for an alleged failure to benchmark the international/specified domestic transactions. Before imposing the penalty, the Revenue must specify which documents or information were not submitted; a penalty founded on inadequate benchmarking is impermissible.
Ratio: s.271G is confined to non-furnishing of called-for documents/information; it cannot be used to penalise the quality or absence of benchmarking, and the Revenue must identify the specific non-furnished items.
Relevance: Leading Delhi High Court authority delimiting s.271G; directly defeats penalties premised on benchmarking failure rather than non-production of documents.
D. PRACTITIONER'S NOTE
Documentation governance: (1) prepare the Rule 10D local file contemporaneously; (2) assess master-file (Rule 10DA) and CbCR (s.286) obligations against the thresholds and file the relevant Forms (3CEAA/3CEAB/3CEAD) on time; (3) respond to s.92D(3) notices within the statutory window; (4) where specific data is not maintained in the ordinary course, document the reason promptly to support a s.273B reasonable-cause defence against s.271G.
Penalty strategy: treat s.271AA (maintenance/reporting) and s.271G (production) separately; for both, the reasonable-cause defence (s.273B) is decisive — build the record of bona fide compliance before the penalty stage.
E. SOURCES & CITATIONS
Statutory text verified against the Income-tax Act, 1961 (Bare Act, as amended by the Finance Act, 2025), cross-checked for FA 2026 against the firm's '00 Finance Act 2026 Amendment Tracker.xlsx'. Marginal headings reproduced verbatim from the Gazette text.
Case citations verified against publicly reported sources (ITR / Taxman / itatonline.org / Indian Kanoon / official High Court and Supreme Court records). Only decisions actually on point for this section's substantive law are listed; no citation has been invented or paraphrased into existence.
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.