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

Under section 166(7) of the Income-tax Act, 2025, as substituted w.e.f. 1-4-2026, the period of limitation for making the assessment order expires on 31st March of a year, and a reference was made to the TPO. By which date must the TPO pass the order under section 166(6)?

The TPO must pass the order on or before 31st January of that year. Section 166(7), as substituted from 1-4-2026, requires the order before one month prior to the month of limitation expiry, so a 31st March expiry gives 31st January.

  1. A31st January of that yearCorrect
  2. B31st December of the preceding year
  3. C31st March of that year
  4. D28th or 29th February of that year

Explanation

Section 166(7) as substituted requires the order at any time before one month prior to the month in which limitation expires. For expiry on 31st March, the order must be made on or before 31st January of that year. The old sixty-day rule, which would give about 30th January, no longer applies, and 31st December relates to a different case.

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