E-Advance Rulings Scheme
The Finance Act, 2021 replaced the Authority for Advance Rulings with the Board for Advance Rulings (BAR) and empowered the Central Government to establish a faceless mechanism for advance rulings. Accordingly, the e-Advance Rulings Scheme, 2022, was notified on 18-01-2022 to process applications digitally and ensure efficiency and transparency.
Application Procedure
- Applications must be filed inForm 34C,Form 34D, Form 34DA, 34E, or Form 34EA, as applicable, via email to bar.application@incometax.gov.in.
- Applicants not assessed in India must provide their head office details, place of residence and office located or likely to be located in India, and details of the representative in India.
- The BAR Secretary reviews applications and may return defective ones for correction.
- If an application has already been allowed by the Authority for Advance Rulings, it is deemed allowed by BAR.
- Applications can be withdrawn within 30 days of filing. Applications pending as of 01-09-2021 before AAR can be withdrawn by 31-10-2024, and orders rejecting them must be issued by 31-12-2024.
Processing of Application
- Upon allocation, BAR forwards a copy of the application:
o To the Principal Commissioner or Commissioner (if the applicant is already assessed in India).
o To the Joint Secretary (Foreign Tax & Tax Research) (if the applicant is not assessed in India).
- The Joint Secretary assigns the case to the appropriate Principal Chief Commissioner of Income-tax (International Taxation) or Chief Commissioner of Income-tax (International Taxation) based on the applicant’s location.
- If relevant records are unavailable, BAR may proceed with the case based on available materials.
Order of Advance Ruling
- If an application is allowed, BAR issues a notice for submission of further materials.
- If the BAR intends to reject an application, an opportunity is given to the applicant to explain why the application should not be rejected. The applicant may request a hearing through video conferencing to present his explanation.
- BAR must pronounce its ruling within 6 months of receiving the application.
- If Members of BAR differ in opinion, the matter is referred to the Principal Chief Commissioner (International Taxation), who assigns an additional Member for a majority decision.
Rectification of Mistakes
- BAR may amend its ruling to correct mistakes before it is given effect by the AO.
- Corrections can be made suo motu or based on requests from the applicant or tax authorities.
Communication and Proceedings
- All communications occur electronically through email..
- Applicants can represent themselves or appoint an authorised representative.
- No personal appearance is required—hearings take place via video conferencing.
- Proceedings are confidential and not open to the public.
Appeal Against BAR Rulings
- Appeals against BAR orders can be filed with the High Court within 60 days (extendable by 30 days for valid reasons).
- Appeals may be filed by either the applicant or the Assessing Officer, as directed by the Principal Commissioner/Commissioner.
Language & Publication
- English or Hindi may be used. If documents are in another language, English translations must be submitted.
- Orders may be published in authoritative reports at BAR’s discretion.
Effect of Advance Ruling
- The ruling would remain in force unless there is a change in law or facts.
- It applies for multiple assessment years unless otherwise restricted by law.
Administration
- The Principal Chief Commissioner (International Taxation) oversees the scheme’s implementation.