Procedure on receipt of application
[Section-384 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 384(1) of Income Tax Act 2025
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.
Section 384(2) of Income Tax Act 2025
384(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.
Section 384(3) of Income Tax Act 2025
384(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 in section 380(b)(iv) 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)(iv) or in the case of an applicant falling in section 380(b)(v).
Section 384(4) of Income Tax Act 2025
384(4) The application shall not be rejected under sub-section (2), unless an opportunity has been given to the applicant of being heard and the reasons for such rejection are given in the order.
Section 384(5) of Income Tax Act 2025
384(5) A copy of every order made under sub-section (2) shall be sent to the applicant and to the Principal Commissioner or Commissioner.
Section 384(6) of Income Tax Act 2025
384(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.
Section 384(7) of Income Tax Act 2025
384(7) On a request from the applicant, the Board for Advance Rulings shall, before pronouncing its advance ruling, provide an opportunity to the applicant of being heard, either in person or through a duly authorised representative.
Section 384(8) of Income Tax Act 2025
384(8) A copy of the advance ruling pronounced by the Board for Advance Rulings, duly signed by the Members and certified in the manner, as prescribed shall be sent to the applicant and to the Principal Commissioner or Commissioner, as soon as may be, after such pronouncement.
Section 384(9) of Income Tax Act 2025
384(9) In this section, “authorised representative” shall have the meaning assigned to it in section 515(3)(a), as if the applicant were an assessee.
FAQs on Section 384 of Income Tax Act 2025
What happens after the Board for Advance Rulings receives an application?
The Board forwards a copy of the application to the Principal Commissioner or Commissioner and calls upon them to furnish the relevant records, which must be returned at the earliest opportunity.
Can the Board for Advance Rulings reject an application?
Yes, after examining the application and the records, the Board may either allow or reject the application by an order.
On what grounds can an application be rejected under Section 384?
An application shall be rejected if:
(a) the question is already pending before any income-tax authority, Appellate Tribunal, or any court (except for specified resident applicants),
(b) it involves the determination of fair market value of any property,
(c) it relates to a transaction or issue designed prima facie for the avoidance of income-tax, except in the case of certain resident or specified applicants.
Is the applicant given a chance to be heard before rejection of an application?
Yes, an application cannot be rejected unless the applicant is given an opportunity of being heard and the reasons for rejection are stated in the order.
Who receives a copy of the order passed on the application?
A copy of the order is sent to both the applicant and the Principal Commissioner or Commissioner.
What follows if the application is allowed by the Board?
If allowed, the Board will examine further material submitted or obtained and pronounce its advance ruling in writing within six months from the date of receipt of the application.
Does the applicant have a right to be heard before the ruling is pronounced?
Yes, upon request, the applicant must be given an opportunity to be heard either in person or through a duly authorised representative before the ruling is pronounced.
How is the advance ruling communicated to the parties?
A certified copy of the advance ruling, signed by the Members, is sent to the applicant and the Principal Commissioner or Commissioner as soon as possible after pronouncement.
Who is considered an authorised representative in this context?
An authorised representative has the meaning assigned in Section 515(3)(a), treating the applicant as if they were an assessee.
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