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

Kaveri Pharma Ltd's assessment for a tax year is subject to a reference to the TPO under section 166. The limitation for completing the assessment expires on 31st March of a year. As the section stands after substitution of sub-section (7) with effect from 1-4-2026, by what date must the TPO make his order under sub-section (6)?

The TPO must pass the order on or before 31st January of that year. Under the substituted section 166(7), the order must be made before one month prior to the month of limitation expiry, and clause (a) fixes 31st January where the assessment limitation expires on 31st March.

  1. A31st January of that yearCorrect
  2. B31st December of the preceding year
  3. C30th April of that year
  4. D31st March of that year

Explanation

Amended section 166(7) requires the TPO order before one month prior to the month in which the assessment limitation expires. Where the period expires on 31st March, clause (a) requires the order on or before 31st January. The old rule of sixty days before expiry is no longer the text.

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