Advance Ruling

• Meaning & Applicant
• Application for Advance Ruling [Sec. 245-Q]
• Procedure on receipt of application [Sec. 245-R]
• Appellate Authority not to proceed in certain cases [Sec. 245RR]
• Applicability of Advance Ruling [Sec. 245S]
• Advance Ruling to be void in certain circumstances [Sec. 245T]
• Powers of the Authority [Sec. 245U]
• Procedure of the Authority [Sec. 245V]

Advance Ruling - meaning thereof

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• An applicant desirous of obtaining an advance ruling may make an application stating the question on which the advance ruling is sought in quadruplicate in:

  1. in Form No. 34C in respect of a non-resident applicant;
  2. in Form No. 34D in respect of a resident applicant seeking advance ruling in relation to a transaction undertaken or proposed to be undertaken by him with a non-resident; and
  3. in Form No. 34E in respect of a notified resident

  and shall be verified in the manner indicated therein.
  
  
• The application shall be accompanied by a fee of Rs.2500.
  
  
• An applicant may withdraw an application within 30 days from the date of the application.
  
  
• An application shall be presented by the applicant in person or by an authorised representative to the Secretary or any other officer notified in writing by the Secretary or sent by registered post addressed to the Secretary along with a fee (in the form of a Demand Draft drawn in favour of "Authority for Advance Rulings" payable at New Delhi).
  
  
• An application sent by registered post shall be deemed to have been made on the date on which it is received in the office of the Authority.
  
  
• If the applicant is not hitherto assessed in India , he shall indicate in Annexure I to the application:
  ( a ) his head office in any other country,

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• 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. Where any records have been called for by the Authority, such records shall, as soon as possible, be returned to the Commissioner.
  
  
• The Authority may, after examining the application and the records called for, by order, either allow or reject the application. However, 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;

( iii ) relates to a transaction or issue which is designed prima facie for the avoidance of income-tax [except in the case of a specified resident applicant]

shall be rejected by the authority.

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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, u/s 245Q(1).

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• The advance ruling pronounced by the Authority u/s 245R shall be binding only:

( 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.

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• Where the Authority finds, on a representation made to it by the Commissioner or otherwise, that an advance ruling pronounced by it 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 to the applicant as if such advance ruling had never been made.
  
  
• A copy of such order shall be sent to the applicant and the Commissioner.

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 as are referred to in section 131 of this Act.

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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.