Penalty re Transfer Pricing Documentation

Section 442 — - PENALTY RE TRANSFER PRICING DOCUMENTATION

Section 442 of the Income-tax Act, 2025 corresponds to s. 271AA - s. 271G of the Income-tax Act, 1961.

STATUTORY ARCHITECTURE

2% of value of each international transaction or specified domestic transaction in respect of which the assessee fails to (a) maintain prescribed information or document, (b) report transaction, (c) furnish prescribed information or document. TP penalty companion to s. 439 [270A] for the 200% misreporting on TP additions.

PRACTITIONER PLANNING NOTES

• Maintain TP documentation per Rule 10D -- master file, local file, country-by-country report (where applicable).
• Form 3CEB (CA-certified TP report) by 31-Oct of AY -- failure attracts s. 442 [271AA].
• Reasonable cause defence available; document in writing.

CROSS-REFERENCES

• s. 439 (under-reporting or misreporting -- master penalty).
• s. 440 (immunity application).
• s. 469 or 470 (waiver or reasonable-cause).
• s. 471 or 472 (procedure or limitation).