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CA Final · Direct Tax Laws & International Taxation · Transfer Pricing

For Sundaram Pharma Ltd, the limitation for the assessment order expires on 31 March of a year, and the AO made a reference to the TPO. Under section 166(7) as substituted with effect from 1-4-2026, by when must the TPO pass the order under section 166(6)?

The TPO must pass the order on or before 31 January of that year. Under the substituted section 166(7), the order must be made before one month prior to the month in which limitation expires, and for a 31 March expiry that date is 31 January.

  1. ASixty days before 31 March
  2. BOn or before 31 January of that yearCorrect
  3. COn or before 28 February of that year
  4. DOn or before 31 October of that year

Explanation

The substituted sub-section (7) requires the TPO order at any time before one month prior to the month in which the limitation expires. Where the period expires on 31 March, the order must be made on or before 31 January. The earlier sixty-days rule (option A) was replaced. The 31 October date applies where limitation expires on 31 December.

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