Why does my laptop gets extremely hot when battery is in and an intensive task is running?

You are likely to be using the thinkpad 65W charger which limits the possible speed

Thinkpad does NOT run at the highest possible speed when you are using a 65W charger alone, without battery plugged in. It would run at full speed if you are using the 90W charger, however. Putting a battery in would allow the CPU to run at full speed, irrespective of the charger type, thus the temperature difference.

Consider using TPFancontrol. Good luck.

Which CPU do you have? 92C is fine for the i5 2520M.

Having the battery connected raises the temperature because it permits the system to run in its maximum performance mode. Without the battery connected, the system has to drop the maximum CPU frequency because the AC power source cannot supply the instantaneous surge of power needed when the CPU comes out of a temporary idle state.

For example, when the CPU is waiting for memory, many of the execution units go idle. Once the blocking instruction completes, the CPU can suddenly go from almost completely idle to almost completely at full burst. The laptop needs the battery connected to accommodate this surge.

Sandy Bridge CPUs have turbo boost. If under maximum load, they will raise their clock frequency until they are just about to overheat so long as they can operate reliably. 92C is just about to overheat for an i5-2520M, so it's functioning as designed. If you'd prefer it run cooler but get a little less performance, you can disable turbo boost.