ADVANCE
RULINGS
Definitions.
245N. In this
Chapter, unless the context otherwise requires,—
65[R2] [(a) “advance ruling” means—
(i) a determination by the Authority
in relation to a transaction which has been undertaken or is proposed to be
undertaken by a non-resident applicant; or
(ii) a determination
by the Authority in relation to 65a[R3] [the
tax liability of a non-resident arising out of] a transaction which
has been undertaken or is proposed to be undertaken by a resident applicant
with 65b[R4] [such]
non-resident, and such determination
shall include the determination of any question of law or of fact specified in
the application;
(iii) a
determination or decision by the Authority in respect of an issue relating to
computation of total income which is pending before any income-tax authority or
the Appellate Tribunal and such determination or decision shall include the
determination or decision of any question of law or of fact relating to such
computation of total income specified in the application :
65c[R4] [Provided that
where an advance ruling has been pronounced, before the date on which the Finance
Bill, 2003 receives the assent of the President, by the Authority in respect of
an application by a resident applicant referred to in sub-clause (ii) of this clause as it stood immediately
before such date, such ruling shall be binding on the persons specified in
section 245S;]
(b) “applicant” means any person who—
(i) is a non-resident referred to in sub-clause (i) of clause (a); or
(ii) is a resident referred to in sub-clause (ii) of clause (a); or
(iii) is a resident
falling within any such class or category of persons as the Central Government
may, by notification in the Official Gazette66[R5] , specify in this behalf; and
(iv) makes an
application under sub-section (1) of section 245Q;]
(c) “application” means an application made to the Authority
under sub-section (1) of section 245Q;
(d) “Authority” means the Authority for
Advance Rulings constituted under section 245-O;
(e) “Chairman” means the Chairman of the
Authority;
(f) “Member” means a Member of the Authority
and includes the Chairman.
Authority for
Advance Rulings.
245-O. (1) The
Central Government shall constitute an Authority for giving advance rulings, to
be known as “Authority for Advance Rulings”.
(2) The Authority shall consist of the following Members appointed
by the Central Government, namely :—
(a) a Chairman, who is a retired Judge of the Supreme Court;
(b) an officer of the Indian Revenue Service who is qualified
to be a member of the Central Board of Direct Taxes;
(c) an officer of the Indian Legal Service who is, or is
qualified to be, an Additional Secretary to the Government of India.
(3) The salaries and allowances payable to, and the terms and
conditions of service of, the Members shall be such as may be prescribed.
(4) The Central Government shall provide the Authority with such
officers and staff as may be necessary for the efficient exercise of the powers
of the Authority under this Act.
(5) The office of the Authority shall be located in Delhi.
Vacancies,
etc., not to invalidate proceedings.
245P. No proceeding before, or pronouncement of advance ruling by, the Authority shall be questioned or shall be invalid on the ground merely of the existence of any vacancy or defect in the constitution of the Authority.
Application
for advance ruling.
245Q. (1) An applicant desirous of obtaining an
advance ruling under this Chapter may make an application in such form and in such
manner as may be prescribed67[R6] , stating the question on which the advance
ruling is sought.
(2) The application shall be made in quadruplicate and be accompanied
by a fee of two thousand five hundred rupees.
(3) An applicant may withdraw an application within thirty days
from the date of the application.
Procedure on
receipt of application.
245R. (1) On
receipt of an application, the Authority shall cause a copy thereof to be
forwarded to the Commissioner and, if necessary, call upon him to furnish the
relevant records :
Provided that where any records have been called for by the Authority in any
case, such records shall, as soon as possible, be returned to the Commissioner.
(2) The Authority may, after examining the application and the
records called for, by order, either allow or reject the application
:
68[R7] [Provided that the Authority shall not
allow the application where the question raised in the application,—
(i) is already pending before any income-tax authority or Appellate
Tribunal [except in the case of a resident applicant falling in sub-clause (iii)
of clause (b) of section 245N] or any court;
(ii) involves
determination of fair market value of any property;
(iii) relates
to a transaction or issue which is designed prima facie for the avoidance of income-tax [except in the
case of a resident applicant falling in sub-clause (iii) of clause (b)
of section 245N]:]
Provided further that no application shall be rejected under
this sub-section unless an opportunity has been given to the applicant of being
heard:
Provided also that
where the application is rejected, reasons for such rejection shall be given in
the order.
(3) A copy of every order made under sub-section (2) shall be
sent to the applicant and to the Commissioner.
(4) Where an application is allowed under sub-section (2), the
Authority shall, after examining such further material as may be placed before
it by the applicant or obtained by the Authority, pronounce its advance ruling
on the question specified in the application.
(5) On a request received from the applicant, the Authority
shall, before pronouncing its advance ruling, provide an opportunity to the
applicant of being heard, either in person or through a duly authorised
representative.
Explanation.—For the purposes of this sub-section,
“authorised representative” shall have the meaning assigned to it in
sub-section (2) of section 288, as if the applicant were an assessee.
(6) The Authority shall pronounce its advance ruling in writing
within six months of the receipt of application.
(7) A copy of the advance ruling pronounced by the Authority,
duly signed by the Members and certified in the prescribed manner69[R8] shall be sent to the applicant and to the
Commissioner, as soon as may be, after such pronouncement.
70[R9] [Appellate
authority not to proceed in certain cases.
245RR. No
income-tax authority or the Appellate Tribunal shall proceed to decide any
issue in respect to which an application has been made by an applicant, being a
resident, under sub-section (1) of section 245R.]
Applicability
of advance ruling.
245S. (1) The advance ruling pronounced by the
Authority under section 245R shall be binding only—
(a) on the
applicant who had sought it;
(b) in respect of
the transaction in relation to which the ruling had been sought; and
(c) on the
Commissioner, and the income-tax authorities subordinate to him, in respect of
the applicant and the said transaction.
(2) The advance ruling referred to in sub-section (1) shall be
binding as aforesaid unless there is a change in law or facts on the basis of
which the advance ruling has been pronounced.
Advance ruling
to be void in certain circumstances.
245T. (1) Where the Authority finds, on a
representation made to it by the Commissioner or otherwise, that an advance
ruling pronounced by it under sub-section (6) of section 245R has been obtained
by the applicant by fraud or misrepresentation of facts, it may, by order,
declare such ruling to be void ab initio and thereupon all the
provisions of this Act shall apply (after excluding the period beginning with
the date of such advance ruling and ending with the date of order under this sub-section)
to the applicant as if such advance ruling had never been made.
(2) A copy of the order made under sub-section (1) shall be sent
to the applicant and the Commissioner.
245U. (1) The Authority shall, for the purpose of
exercising its powers, have all the powers of a civil court under the Code of
Civil Procedure, 1908 (5 of 1908) as are referred to in section 131 of this
Act.
(2) The Authority shall be deemed to be a civil court for the purposes of section 195, but not for the purposes of Chapter XXVI, of the Code of Criminal Procedure, 1973 (2 of 1974) and every proceeding before the Authority shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code (45 of 1860).
Procedure of Authority.
245V. The
Authority shall, subject to the provisions of this Chapter, have power to
regulate71[R10] its own procedure in all matters arising out of the exercise of its
powers under this Act.]
[R1]Chapter XIX-B,
consisting of sections 245N to 245V, inserted by the Finance Act, 1993, w.e.f.
1-6-1993.
[R2]Clauses (a) and (b) substituted by
the Finance Act, 2000, w.e.f. 1-6-2000. Prior to their substitution, clauses (a)
and (b), as inserted by the Finance Act, 1993, w.e.f. 1-6-1993 and later
on substituted by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998, read as
under :
‘(a) “advance ruling” means—
(i) a determination by
the Authority in relation to a transaction which has been undertaken or is
proposed to be undertaken by a non-resident applicant and such determination
shall include the determination of any question of law or of fact specified in
the application;
(ii) a
decision by the Authority in relation to an assessment which is pending before
any of the Income-tax Authority or the Tribunal in case of an applicant who is
a resident in India and such decision shall include the decision on question of
law or fact arising out of the orders of assessment in respect of which an
application has been made by a resident applicant;
(b) “applicant” means any person who—
(i) is a non-resident; or
(ii) is a resident falling within any such class or category of
persons as the Central Government may, by notification in the Official Gazette,
specify in this behalf;
(iii) makes an application under sub-section (1) of
section 245Q;’
[R6]See rule 44E
and Form Nos. 34C to 34E for application for obtaining advance ruling in
quadruplicate.
[R7]Substituted by the Finance Act, 2000, w.e.f.
1-6-2000. Prior to its substitution, proviso, as amended by the Finance (No. 2)
Act, 1998, w.e.f. 1-10-1998, read as under :
“Provided
that the Authority shall not allow the application except in the case of a
resident applicant where the question raised in the application,—
(a) is already pending in the applicant’s case before any
income-tax authority, the Appellate Tribunal or any court;
(b) involves determination of fair market value
of any property;
(c) relates to a transaction which is designed prima facie for the avoidance of income-tax:”
[R10] See Authority for Advance Ruling (Procedure) Rules, 1996.