ADVANCE RULING FOR NON RESIDENTS

MADE BY:-

Neha aggarwalPrabhjot saini

Sumit soniSaurabh chabhra

Harpreet

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; or

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 application cant with such non resident, and such determination shall include the determination of any question of law or of fact specified in the application;

“Advance Ruling” means

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 or decision 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;

Contd……

A non-resident who makes an application under section

245Q(1) A resident who makes an application under section

245Q(1) in respect of a transaction which has been undertaken (or proposed to be undertaken) by him or it with a non- resident.

A resident falling within any such class or category of persons as the Central Government may, by notification in the Official Gazette, specify in this behalf; (i.e, a public sector company) who makes an application under section 245Q(1)

Meaning of applicant

The advance ruling is required to be pronounced by

an authority known as the Authority for Advance Rulings, consisting of a Chairman, who is a retired Judge of the Supreme Court and two members of the rank of Additional Secretary to the Government of India, one each from the Indian Revenue Service and the Indian Legal Service.

Authority for advance ruling

As per the modified position of the amended Rule

44E, an application for advance ruling under S. 245Q(1) can be made in the following instances:

by a non-resident applicant through Form 34C; by Form 34D in respect of persons seeking advance

ruling in relation to tax liability of a non-resident arising out of transaction undertaken or proposed to be undertaken by him with a non-resident;

by Form 34E in respect of persons falling within any such category or class of persons as notified by the Central Government.

Procedure for filing applications

The application should be accompanied by a fee of

Rs 2,500/- (Two Thousand Five Hundred Indian rupees) through a bank draft drawn in favour of the 'Authority for Advance Rulings’ payment at New Delhi .

PAYMENT OF FEE

An advance ruling cannot be sought where the

question: Is already pending in the case of the applicant

before any income tax authority, the Appellate Tribunal or any court; or

Involves determination of fair market value of any property; or

Relates to a transaction, which is designed prima facie for avoidance of income tax.

The questions on which advance ruling cannot be sought

Submission of additional facts before the authority Hearing of application Continuation of proceeding after death of the

applicant Hearing of application ex-parte Pronouncement of advance ruling Time limit for pronouncement of advance ruling Order of advance ruling to be sent

Procedure on receipt of application

 The applicant may withdraw his  application within

thirty days from the date of such application and thereafter only with the leave of the Authority.

Withdrawal of application

   The Authority may suo motu or on a petition by the

applicant or the Commissioner, but before pronouncement of an advance ruling or before an advance ruling pronounced has been given effect to, on being satisfied that an order/advance ruling was pronounced under mistake of law or fact, modify such order/advance ruling in such respects as it considers appropriate, after allowing the applicant and the Commissioner a reasonable opportunity of being heard.

Modification of the order/advance ruling

  (1) The Authority may, with a view to rectifying

any mistake apparent from the record, amend any advance ruling pronounced by it before such ruling has been given effect to.

(2) Such amendment may be made suo motu or when the mistake is brought to the notice of the Authority by the applicant or the Commissioner, but only after allowing the applicant and the Commissioner a reasonable opportunity of being heard.

Rectification of mistakes

The ruling made by the Authority for Advance Rulings

is binding only: on the applicant who had sought the

ruling; in respect of the transaction in relation to

which it had been sought; and on the Commissioner and the Income Tax

authorities sub-ordinate to him in respect of the applicant and the said transaction.

Applicability of advance ruling

The advance ruling shall be void if it is subsequently found by the authority, on a representation made to it by commissioner or revenue , to have been by fraud or misrepresentation of facts. However on receipt of such representation , a notice shall be issued to the applicant along with a copy of the representation for rebuttal and reasonable opportunity shall be allowed to the applicant and he commissioner for being heard before passing order declaring the advance ruling to be void.

Advance ruling to be void in certain circumstances

The Authority shall, for the purpose of exercising its powers

regarding discovery and inspection, enforcing the attendance of any person and examining him on oath, issuing commissions and compelling production of books of account and other records, have all the powers of a civil court under the Code of Civil Procedure, 1908 (5 of 1908).

The Authority 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 (2 of 1974), and every proceeding before the Authority shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code (45 of 1860)

Powers of Authority:-

Helps the applicant in planning his income-tax

affairs well in advance.

Brings certainty in determining the tax liability.

Helps avoiding long drawn and expensive

litigation.

It is inexpensive, expeditious and binding.

BENEFITS OF ADVANCE RULING