[CHAPTER XIX-B
ADVANCE
RULINGS
245N. In this Chapter, unless the context otherwise
requires,—
[(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 [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 [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 :
[Provided that where an advance
ruling has been pronounced, before the date on which the Finance Act, 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 Gazette, 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
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 prescribed, 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.
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 :
[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 manner shall be sent to the applicant and to
the Commissioner, as soon as may be, after such pronouncement.
[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
245Q].]
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).
245V. The Authority shall, subject to the
provisions of this Chapter, have power to regulate its
own procedure in all matters arising out of the exercise of its powers under
this Act.]