Do you know the Provisions regulating advance rulings??

The provisions of advance rulings are briefly discussed below:

Meaning of advance ruling [Sec.245N (a)]: ‘Advance ruling’ means:

1. 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 fact specified in the application ; or
2. 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 fact specified in the application ; or
3. 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 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.

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 section 245N (a) (ii) as it stood immediately before such date, such ruling shall be binding on the persons specified in the section 245S.

Procedure on receipt of application [Sec.245R]: On receipt of an application, the authority shall forward a copy of such application to the Commissioner and if necessary, the Authority shall call upon the Commissioner to furnish the relevant records. Such records shall, as soon as possible, be returned to the Commissioner. The Authority, after examining the application and the records, may, by order, either allow or reject the application and a copy of such order shall be sent to the applicant and to the Commissioner.

The Authority shall not allow the application if the question raised in the application—

1. is already pending before any income-tax Authority or Appellate Tribunal (except in the case of a resident applicant falling within such class as notified by the Central Government)
2. involves determination of fair market value of any property ;
3. relates to the transaction or issue which is designed prima facie for the avoidance of income-tax (except in the case of a resident applicant falling with such class as notified by the Central Government).

No application shall be rejected unless an opportunity has been given to the applicant of being heard. If the application is rejected, reasons for such rejection shall be given in order.

If the application is allowed, 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. The Authority shall, on a request received from the applicant, before pronouncing its advance ruling, provide an opportunity to the applicant of being heard, either in persons or through a duly authorized representative. A copy of advance ruling pronounced by the Authority shall be sent to the applicant and the Commissioner as soon as possible.

No Income-tax Authority or the Appellate Tribunal shall proceed to decide any issue in respect to which an application has been made by a resident applicant [Sec. 245T].

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