Amended and updated notes on section 245-O of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Authority for Advance Rulings.
Chapter XIXB (Sections 245N to 245V) of the Income Tax Act 1961 deals with the provisions related to Advance rulings . Section 245-O of IT Act 1961 provides for Authority for Advance Rulings.
Recently, we have discussed in detail section 245N (Definitions) of IT Act 1961. Today, we learn the provisions of section 245-O of Income-tax Act 1961. The amended provision of section 245-O is effective for financial year 2022-23 relevant to the assessment year 2023-24.
In this article, you will learn detail of the provisions of section 245-O of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.
Section-245-O: Authority for Advance Rulings
Section 245O(1) of Income Tax Act
The Central Government shall constitute an Authority for giving advance rulings, to be known as “Authority for Advance Rulings”:
Provided that the Authority shall cease to act as an Authority for Advance Rulings for the purposes of Chapter V of the Customs Act, 1962 (52 of 1962) on and from the date of appointment of the Customs Authority for Advance Rulings under section 28EA of that Act.
Provided further that the Authority so constituted shall cease to operate on and from such date as the Central Government may, by notification in the Official Gazette, appoint.
[Second proviso to sub-section(1) of section 245-O newly inserted w.e.f. 1-April-2021 by the Finance Act 2021]
[The Central Government appoints 1st day of September, 2021 as the date for the purposes of the second proviso to sub-section (1) of section 245-O vide Notification No. 97/2021, S.O. 3562(E) dated 01.09.2021]
Section 245O(1A) of Income Tax Act
On and from the date of appointment of the Customs Authority for Advance Rulings referred to in the proviso to sub-section (1), the Authority shall act as an Appellate Authority, for the purpose of Chapter V of the Customs Act, 1962 (52 of 1962):
Provided that the Authority shall not admit any appeal against any ruling or order passed earlier by it in the capacity of the Authority for Advance Rulings in relation to any matter under Chapter V of the Customs Act, 1962 (52 of 1962) after the date of such appointment of the Customs Authority for Advance Rulings.
Section 245O(2) of Income Tax Act
The Authority shall consist of a Chairman and such number of Vice-chairmen, revenue Members and law Members as the Central Government may, by notification, appoint.
Section 245O(3) of Income Tax Act
A person shall be qualified for appointment as—
(a) Chairman, who has been a Judge of the Supreme Court or the Chief Justice of a High Court or for at least seven years a Judge of a High Court;
(b) Vice-chairman, who has been Judge of a High Court;
(c) a revenue Member—
- (i) from the Indian Revenue Service, who is, or is qualified to be, a Member of the Board; or
- (ii) from the Indian Customs and Central Excise Service, who is, or is qualified to be, a Member of the Central Board of Excise and Customs,
on the date of occurrence of vacancy;
(d) a law Member from the Indian Legal Service, who is, or is qualified to be, an Additional Secretary to the Government of India on the date of occurrence of vacancy.
Section 245O(4) of Income Tax Act
The terms and conditions of service and the salaries and allowances payable to the Members shall be such as may be prescribed.
Section 245O(5) of Income Tax Act
The Central Government shall provide to the Authority with such officers and employees, as may be necessary, for the efficient discharge of the functions of the Authority under this Act.
Section 245O(6) of Income Tax Act
The powers and functions of the Authority may be discharged by its Benches as may be constituted by the Chairman from amongst the Members thereof.
Section 245O(6A) of Income Tax Act
In the event of the occurrence of any vacancy in the office of the Chairman by reason of his death, resignation or otherwise, the senior-most Vice-chairman shall act as the Chairman until the date on which a new Chairman, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office.
Section 245O(6B) of Income Tax Act
In case the Chairman is unable to discharge his functions owing to absence, illness or any other cause, the senior-most Vice-Chairman shall discharge the functions of the Chairman until the date on which the Chairman resumes his duties.
Section 245O(7) of Income Tax Act
A Bench shall consist of the Chairman or the Vice-chairman and one revenue Member and one law Member:
Provided that where the Authority is dealing with an application seeking advance ruling in any matter relating to this Act, the revenue Member of the Bench shall be such Member as referred to in sub-clause (i) of clause (c) of sub-section (3).
Section 245O(8) of Income Tax Act
The Authority shall be located in the National Capital Territory of Delhi and its Benches shall be located at such places as the Central Government may, by notification specify.