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Understanding the Procedure of Advance Rulings


Understanding the Procedure of Advance Rulings, Check Complete Details for Procedure of Advance Rulings. Chapter XIX-B, consisting of sections 245N to 245V provides a scheme for giving advance rulings in respect of transactions in order to avoiding needless litigation and promoting better tax-payer relations. It is a little difficult topic but here we are trying to make it easily understandable for you. We have given you details which will help you to understand & analyze the provisions relating to Advanced Rulings. So, let us study about Advance Rulings in depth.

Application for Advance Rulings:

Section 245Q (1), provides that an applicant desirous of obtaining an advance ruling may make an application in the prescribed form and in the prescribed manner. As per section 245Q (2), the application shall be accompanied by a fee of Rs. 10,000/- or such fee as may be prescribed, whichever is higher.

Rule 44E prescribes the form of application for obtaining an advance ruling. Every application under Rule 44E shall be accompanied by the proof of payment of fees.

Procedure on receipt of application:

The Authority on receipt of an application will send a copy to the Principal Commissioner or Commissioner concerned and wherever considered necessary, also call upon the Principal Commissioner or Commissioner to furnish relevant records. Such records will be returned to the Principal Commissioner as soon as possible.

Applicability of Advance Ruling:

The advance ruling shall be binding only on the applicant who has sought it and in respect of     the specific transaction in relation to which the advance ruling was sought. It will also be binding on the Principal Commissioner or Commissioner and the Income-tax Authorities who are having jurisdiction over the applicant.

The advance ruling will continue to remain in force unless there is a change either in law or in   fact on the basis of which the advance ruling was pronounced.

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Advance Ruling to be void in certain circumstances:

Where an advance ruling has been obtained by the applicant by fraud or misrepresentation of facts, the Authority may, by order, declare such ruling to be void from the starting. The provisions of the Act shall apply to the applicant as if such advance ruling had never been made. A copy of this order shall be sent to the applicant and the Principal Commissioner.

Powers of the Authority:

The authority will have all the powers of the Civil Court in respect of discovery and inspection, it can enforce the attendance of any person, including any officer of a banking company and examining him, to issue commissions and to compel the production of books of accounts and other records. It will also have the power to regulate its own procedure in all the matters arising out of exercise of its powers under the Act. The authority would be deemed to be a Civil Court for the purposes of section 195 of the Code of Criminal Procedure Act, 1973.

Procedure of Authority:

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.

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About CA Ridhi Dhoot

The writer is a Chartered Accountant & a Licentiate Company Secretary. You can reach out to her at [email protected]

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