Income Tax Act

Official PDF pages 461–465

SOURCE PDF PAGE 461
( ii )   a determination by the Board for Advance Rulings 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; or
( iii )   a determination by the Board for Advance Rulings in relation to
the tax liability of a resident applicant, arising out of a transaction
which has been undertaken or is proposed to be undertaken by such
applicant; and such determination sha ll include the determination
of any question of law or of fact specified in the application; or
( iv )   a determination or decision by the Board for Advance Rulings 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 or decision shall include the determina -
tion or decision of any question of law or of fact relating to such
computation of total income specified in the application; or
( v )   a determination or decision by the Board for Advance Rulings
whether an arrangement, which is proposed to be undertaken by
any person being a resident or a non-resident, is an impermissible
avoidance arrangement as referred to in Chapter XI or not;
( b )   “applicant” means any person who—
( i )   is a non-resident referred to in clause ( a )( i ); or
( ii )   is a resident referred to in clause ( a )( ii ); or
( iii )   is a resident referred to in clause ( a )( iii ) falling within any such
class or category of persons as the Central Government may, by
notification, specify; or
( iv )   is a resident falling within any such class or category of persons as
the Central Government may, by notification, specify in this behalf;
or
( v )   is referred to in clause ( a )( v ),
and makes an application under section 383(1);
( c )   “application” means an application made to the Board for Advance Rul -
ings under section 383(1);
( d )   “Board for Advance Rulings” means the Board for Advance Rulings
constituted by the Central Government under section 381;
( e )   “Member” means a Member of the Board for Advance Rulings.
Board for Advance Rulings.
381.   (1) The Central Government shall constitute one or more Boards for Advance
Rulings, as may be necessary, for giving advance rulings under this Chapter
on or after such date as the Central Government may, by notification, appoint.
(2) The Board for Advance Rulings shall consist of two members, each being an
officer not below the rank of Chief Commissioner, as may be nominated by the Board.

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Vacancies, etc., not to invalidate proceedings.
382.   No proceeding before, or pronouncement of advance ruling by, the Board for
Advance Rulings, shall be questioned or shall be invalid on the ground merely
of the existence of any vacancy or defect in the constitution of the Board for Advance
Rulings.
Application for advance ruling.
383.   (1) An applicant desirous of obtaining an advance ruling under this Chapter,
may make an application in such form and manner, as may be prescribed,
stating the question on which the advance ruling is sought.
(2) The application shall be accompanied by a fee, as may be prescribed.
(3) An applicant may withdraw an application within thirty days from the date of
the application.
Procedure on receipt of application.
384.   (1) On receipt of an application, the Board for Advance Rulings shall
forward a copy thereof to the Principal Commissioner or Commissioner and,
call upon him to furnish the relevant records, which shall be returned at the earliest
opportunity.
(2) The Board for Advance Rulings may, after examining the application and the
records called for either allow or reject the application by an order.
(3) For the purposes of sub-section (2), an application shall be rejected if the question
raised therein—
( a )   is already pending   before any income-tax authority or Appellate Tribunal
except in the case of a resident applicant falling under section 380( b )( iii )
or any court;
( b )   involves determination of fair market value of any property;
( c )   relates to a transaction or issue which is designed   prima facie   for the
avoidance of income-tax except in the case of a resident applicant falling
in section 380( b )( iii )   or in the case of an applicant falling under section
380( b )( iv ).
(4) The application shall not be rejected under sub-section (2), unless an opportunity
of being heard has been given to the applicant and the reasons for such rejection
are given in the order.
(5) A copy of every order made under sub-section (2) shall be sent to the applicant
and to the Principal Commissioner or Commissioner.
(6) Where an application is allowed under sub-section (2), the Board for Advance
Rulings shall, after examining such further material as may be placed before it by
the applicant or obtained by the Board for Advance Rulings, pronounce its advance
ruling in writing, on the question specified in the application within six months of
the receipt of application.
(7) On a request from the applicant, the Board for Advance Rulings shall, before
pronouncing its advance ruling, provide an opportunity of being heard to the
applicant, either in person or through a duly authorised representative.
(8) A copy of the advance ruling pronounced by the Board for Advance Rulings,
duly signed by the Members and certified in such manner, as may be prescribed

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shall be sent to the applicant and to the Principal Commissioner or Commissioner,
as soon as may be, after such pronouncement.
(9) For the purposes of this section, “authorised representative” shall have the
meaning assigned to it in section 515(3)( a ), as if the applicant were an assessee.
Appellate authority not to proceed in certain cases.
385.   No income-tax authority or the Appellate Tribunal shall proceed to decide
any issue for which an application has been made by an applicant, being a
resident, under section 383(1).
Advance ruling to be void in certain circumstances.
386.   (1) Where on a representation made by the Principal Commissioner or
Commissioner or otherwise, the Board for Advance Rulings finds, that an
advance ruling pronounced under section 384(6) has been obtained by the applicant
by fraud or misrepresentation, then it may by order, declare such ruling to be   void
ab initio   and thereupon, all the provisions of this Act shall apply (after excluding the
period beginning with the date of such advance ruling and ending with the date of
order under this sub-section) to the applicant as if such advance ruling had never
been made.
(2) A copy of the order made under sub-section (1) shall be sent to the applicant
and the Principal Commissioner or Commissioner.
Powers of the Board for Advance Rulings.
387.   (1) The Board for Advance Rulings shall, for the purpose of exercising its
powers, have all the powers of a civil court under the Code of Civil Procedure,
1908 (5 of 1908) as are referred to in section 246 of this Act.
(2) The Board for Advance Rulings shall be deemed to be a civil court for the pur -
poses of section 215 but not for the purposes of Chapter XXVIII of the Bharatiya
Nagarik Suraksha Sanhita, 2023 (46 of 2023) and every proceeding before the Board
for Advance Rulings shall be deemed to be a judicial proceeding under sections 229
and 267 and for the purposes of section 233 of the Bharatiya Nyaya Sanhita, 2023
(45 of 2023).
Procedure of Board for Advance Rulings.
388.   The Board for Advance Rulings 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.
Appeal.
389.   (1) The applicant, if aggrieved by any ruling pronounced or order passed by
the Board for Advance Rulings or the Assessing Officer, on the directions of
the Principal Commissioner or Commissioner, may appeal to the High Court against
such ruling or order of the Board for Advance Rulings within sixty days from the
date of the communication of that ruling or order, in such form and manner, as
may be prescribed.
(2) Where the High Court is satisfied, on an application made by the appellant in
this behalf, that the appellant was prevented by sufficient cause from presenting the
appeal within the period specified in sub-section (1), it may grant further period of
thirty days for filing such appeal.

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CHAPTER XIX
COLLECTION AND RECOVERY OF TAX
A.—General
Deduction or collection at source and advance payment.
390.   (1) The tax on income shall be payable as per this Chapter by way of—
( a )   deduction or collection at source; or
( b )   advance payment; or
( c )   payment under section 392(2)( a ).
(2) The tax referred to in sub-section (1) shall be payable as per the provisions of
this Chapter, irrespective of the fact that the assessment in respect of such income
is to be made in a later tax year.
(3) Nothing contained in this section, shall affect the charge of tax on such income
under section 4(1).
(4) The payment of tax referred to in sub-section (1) shall be in addition to any
other mode of tax recovery to discharge the liability in respect of income assessed
for a tax year.
(5) The tax deducted at source or collected at source or sum referred to in section
392(2)( a )under this Chapter and paid to the Central Government shall be treated
as payment of tax on behalf of the person—
( a )   from whose income such tax has been deducted; or
( b )   from whom such tax has been collected; or
( c )   in respect of whose income such tax has been paid.
(6) The Board may make rules for—
( a )   giving credit of tax deducted or collected or paid to a person referred to
in sub-section (5) and also a person other than the person referred to in
the said sub-section;
( b )   the tax year for which the credit may be given.
Direct payment.
391.   (1) The income-tax on any income shall be payable directly by the assessee
if—
( a )   there is no provision under this Chapter to deduct income-tax on such
income at the time of payment; or
( b )   income-tax has not been deducted as per the provisions of this Chapter.
(2) If an assessee has any income of the nature as specified in section 17(1)( d )   and
such specified security or sweat equity shares are allotted or transferred directly or
indirectly by the current employer which is an eligible start-up referred to in section
140, then direct payment of tax for the purposes of sub-section (1) shall be made
in accordance with in section 289(3).
(3) Where any person, including the principal officer of the company,—
( a )   who is required to deduct any sum as per the provisions of this Act;
or
( b )   referred to in section 392(2)( a ), being an employer,

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does not deduct, or after so deducting fails to pay, or does not pay, the whole or any
part of the tax, as required under this Act, and where the assessee has also failed to
pay such tax directly, then, such person shall, apart from any other consequences
that he may incur, be deemed to be an assessee in default within the meaning of
section 398(1), in respect of such tax.
B.—Deduction and collection at source
Salary and accumulated balance due to an employee.
392.   (1) Any person responsible for paying any income chargeable under the head
“Salaries” shall deduct income-tax on the amount payable and this deduc -
tion shall be made at the time of such payment at the average rate of income-tax
computed on the basis of the rates in force for the tax year in which the payment
is made, on the estimated income of the assessee under this head for such year.
(2)( a ) Without prejudice to the provisions of sub-section (1), the person responsible
for paying any income in the nature of a non-monetary perquisite chargeable to
tax under section 17(1), may pay, at his option, tax on the whole or part of such
income without making any deduction therefrom, at the time when such tax was
deductible under sub-section (1);
( b ) the tax under clause ( a ) shall be determined at the average rate as per sub-sec -
tion (1), on the income chargeable under the head “Salaries” including the income
referred to in the said clause, and shall be construed as if it were a tax deductible at
source from the income under the head “Salaries”, and be subject to the provisions
of this Chapter.
(3) Any person, being an eligible start-up referred to in section 140, responsible for
paying any income of the nature specified in section 17(1)( d ) in any tax year, shall
deduct or pay, as the case may be, tax on such income, on the basis of rates in force
for the tax year in which the specified security or sweat equity share is allotted or
transferred, within the time as specified for the payee in section 289(3).
(4)( a ) The person responsible for making payment under sub-section (1), shall take
into account the following particulars furnished by the assessee, at his option, in
such form and verified in such manner as may be prescribed, for the purpose of
making deduction under the said sub-section and such particulars shall have an
effect of increasing or decreasing the tax to be deducted:—
( i )   any income under the head “Salaries” due or received by the assessee,
from any other employer or employers during the tax year;
( ii )   any relief allowable under section 157, where the assessee being a Gov -
ernment servant, or an employee in a company, co-operative society, local
authority, university, institution, association or body is entitled for such
relief;
( iii )   any loss under the head “Income from house property” for the same tax
year;
( iv )   any income chargeable under any other head of income, not being a loss
under any such head other than the loss specified in sub-clause ( iii ) for
the same tax year;