Amended and updated notes on section 92CD of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to effect to advance pricing agreement.
Chapter X (Sections 92 to 94B) of the Income Tax Act 1961 deals with the provisions related to special provisions relating to avoidance of tax. Section 92CD of IT Act 1961-2023 provides for effect to advance pricing agreement.
Recently, we have discussed in detail section 92CC (Advance pricing agreement) of IT Act 1961. Today, we learn the provisions of section 92CD of Income-tax Act 1961. The amended provision of section 92CD is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 92CD of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.
Section-92CD: Effect to advance pricing agreement
Section 92CD(1) of Income Tax Act
Notwithstanding anything to the contrary contained in section 139, where any person has entered into an agreement and prior to the date of entering into the agreement, any return of income has been furnished under the provisions of section 139 for any assessment year relevant to a previous year to which such agreement applies, such person shall furnish, within a period of three months from the end of the month in which the said agreement was entered into, a modified return in accordance with and limited to the agreement.
Section 92CD(2) of Income Tax Act
Save as otherwise provided in this section, all other provisions of this Act shall apply accordingly as if the modified return is a return furnished under section 139.
Section 92CD(3) of Income Tax Act
If the assessment or reassessment proceedings for an assessment year relevant to a previous year to which the agreement applies have been completed before the expiry of period allowed for furnishing of modified return under sub-section (1), the Assessing Officer shall, in a case where modified return is filed in accordance with the provisions of sub-section (1), pass an order modifying the total income of the relevant assessment year determined in such assessment or reassessment, as the case may be, having regard to and in accordance with the agreement.
Section 92CD(4) of Income Tax Act
Where the assessment or reassessment proceedings for an assessment year relevant to the previous year to which the agreement applies are pending on the date of filing of modified return in accordance with the provisions of sub-section (1), the Assessing Officer shall proceed to complete the assessment or reassessment proceedings in accordance with the agreement taking into consideration the modified return so furnished.
Section 92CD(5) of Income Tax Act
Notwithstanding anything contained in section 153 or section 153B or section 144C,—
(a) the order under sub-section (3) shall be passed within a period of one year from the end of the financial year in which the modified return under sub-section (1) is furnished;
(b) the period of limitation as provided in section 153 or section 153B or section 144C for completion of pending assessment or reassessment proceedings referred to in sub-section (4) shall be extended by a period of twelve months.
Section 92CD(6) of Income Tax Act
For the purposes of this section,—
(i) “agreement” means an agreement referred to in sub-section (1) of section 92CC;
(ii) the assessment or reassessment proceedings for an assessment year shall be deemed to have been completed where—
- (a) an assessment or reassessment order has been passed; or
- (b) no notice has been issued under sub-section (2) of section 143 till the expiry of the limitation period provided under the said section.