ICAI guidance note on Report u/s 92E of the Income Tax Act

As per the Income Tax Act, section 92E covers the following transaction on which a Chartered Accountant needs to prepare a report:

“Every person who has entered into an international transaction or specified domestic transaction during a previous year shall obtain a report from an accountant and furnish such report on or before the specified date in the prescribed form duly signed and verified in the prescribed manner by such accountant and setting forth such particulars as may be prescribed.”

The report/ form has been prescribed in rule 10E as under:

“The report from an accountant required to be furnished under section 92E by every person who has entered into an international transaction or a specified domestic transaction during a previous year shall be in Form No. 3CEB and be verified in the manner indicated therein.”

The above report shall be separate from Normal tax audit report and would be required whether or not Tax audit is required to be conducted or not. Further it not only covers companies but any type of assessee.

The general due date for furnishing such report is 30th November.

In the above section international transaction has been defines u/s 92B as:

“A transaction between two or more associated enterprises, either or both of whom are non-residents, in the nature of purchase, sale or lease of tangible or intangible property, or provision of services, or lending or borrowing money, or any other transaction having a bearing on the profits, income, losses or assets of such enterprises, and shall include a mutual agreement or arrangement between two or more associated enterprises for the allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises.”

To read full definition you can read section 92B.

Specified Domestic transaction has been defined u/s 92BA as under:

“any transaction referred to in section 80A;

any transfer of goods or services referred to in sub-section (8) of section 80-IA;

any business transacted between the assessee and other person as referred to in sub-section (10) of section 80-IA;

any transaction, referred to in any other section under Chapter VI-A or section 10AA, to which provisions of sub-section (8) or sub-section (10) of section 80-IA are applicable; or

any business transacted between the persons referred to in sub-section (6) of section 115BAB;

any other transaction as may be prescribed,

and where the aggregate of such transactions entered into by the assessee in the previous year exceeds a sum of twenty crore rupees.”

Now ICAI has come up with an update in the guidance note for report u/s 92E, updated by Finance act, 2020 which is a 493 page guidance note which includes various illustrations, rules, clauses of report etc.

To read the full guidance report CLICK HERE.