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Procedure on receipt of application for advance ruling

On receipt of an application, the AAR Shall send a copy thereof to the Principal Commissioner or Commissioner and, if necessary, will call upon him to furnish the relevant records. Where any records have been called for by the Authority in any case, such records shall, as soon as possible, be returned to the Principal Commissioner or Commissioner.

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The Authority may, after examining the application and the records called for from the Commissioner, either allow or reject the application. The AAR shall not allow the application in certain circumstances (already discussed earlier). However, no application shall be rejected unless an opportunity has been given to the applicant of being heard. Where the application is rejected, reasons for such rejection shall be given in the order. A copy of every such order shall be sent, both to the applicant and to the Principal Commissioner or Commissioner.

Where an application is allowed, the AAR shall, after examining such further material as may be placed before it by the applicant or obtained by the AAR, pronounce its advance ruling on the question specified in the application.

On a request received from the applicant, the AAR shall, before pronouncing its advance ruling, provide an opportunity to the applicant of being heard, either in person or through a duly authorized representative (The term “Authorised representative” shall have the meaning assigned to it in section 288(2). 

The AAR shall pronounce its advance ruling in writing within six months of the receipt of application.

A copy of the advance ruling pronounced by the AAR, duly signed by the Members and certified in the prescribed manner shall be sent to the applicant and to the Principal Commissioner or Commissioner, as soon as possible, after such pronouncement.

Restriction on further procedure:-

No income-tax authority or the Appellate Tribunal shall proceed to decide any issue in respect to which an application has been made to the AAR by an applicant, being a resident.

Applicability of advance ruling:-

The advance ruling pronounced by the AAR shall be binding only on the applicant who had sought it and that too in respect of the transaction in relation to which the ruling had been sought. Further, it shall be binding on the Principal Commissioner or Commissioner and the Income-tax authorities subordinate to him, in respect of the applicant and the said transaction.

The advance ruling pronouncement as stated above shall be binding as aforesaid, unless there is a change, in law, or facts on the basis of which the advance ruling was pronounced.

Advance ruling to be void in certain circumstances:-

Where the AAR finds, on a representation made to it by the Principal Commissioner or Commissioner or otherwise, that an advance ruling pronounced by it has been obtained by the applicant by fraud or misrepresentation of facts, then the Authority may, by an order, declare such ruling to be void ab initio and thereupon all the provisions of the Act shall apply to the applicant as if such advance ruling had never been made.

A copy of the order made as above shall be sent to the applicant and to the Principal Commissioner or Commissioner.

Powers of the AAR:-

The AAR 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. Powers vested under section 131 are discovery and inspection, enforcing the attendance of any person, including any officer of a banking company and examining him on oath, compelling the production of books of account and other documents, and issuing commissions. It will also have the power to regulate its own proceeding in all the matters arising out of the exercise of its powers under the Income-tax Act.

The AAR 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 and every proceeding before the Authority shall be deemed to be a judicial proceeding under certain provisions of the Indian Penal Code.

 

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