Section 92E — Report from an Accountant to be Furnished

Section 92E of the Income-tax Act, 1961 mandates that every person who has entered into an international transaction or a specified domestic transaction during a previous year must obtain a report from an accountant. This report, in the prescribed form, verifies that the transactions are at arm's length and comply with the transfer pricing regulations. The significance of this section lies in its role in ensuring transparency and compliance with transfer pricing norms, thereby preventing tax evasion through manipulation of prices in international and specified domestic transactions. The statutory test requires the taxpayer to furnish this report by the specified due date, and the burden of proof lies with the taxpayer to demonstrate compliance. In practice, this section is crucial for multinational enterprises operating in India, as it ensures that their cross-border transactions are conducted fairly and in accordance with Indian tax laws.

Common Litigation Flashpoints

1. Failure to furnish the report by the due date
2. Discrepancies in the report regarding arm's length pricing
3. Challenges to the qualifications of the accountant
4. Disputes over the scope of transactions covered under the report

Judgments on Section 92E — Report from an Accountant to be Furnished

• Vodafone International Holdings B.V. vs Union of India & Anr. — SC,
  Section 9 of the Income Tax Act does not cover indirect transfers of capital assets situated in India.
• The Authority for Advance Rulings (Income Tax) and Others vs Tiger Global International II Holdings — SC,
  The DTAA between India and Mauritius allows capital gains to be taxed only in Mauritius, provided the entity holds a valid TRC.
• SAP Labs India Private Limited vs Income Tax Officer, Circle 6, Bangalore — SC,
  The High Court can scrutinize the Tribunal's determination of the arm's length price if it is alleged to be perverse or not in accordance with the guidelines under the IT Act and Rules.
• Aditya Birla Nuvo Limited vs The Deputy Director of Income-tax — HC,
  The beneficial ownership of shares, despite being registered in the name of a permitted transferee, determines the taxability of capital gains in India.