Appellate authority not to proceed in certain cases
[Section-385 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
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).
FAQs on Section 385 of Income Tax Act 2025
What does Section 385 of the Income Tax Act, 2025 deal with?
Section 385 states that no income-tax authority or the Appellate Tribunal shall proceed to decide any issue for which an application has been made under section 383(1) by a resident applicant.
What is the objective of Section 385?
The purpose of Section 385 is to ensure that once an applicant has sought an advance ruling under Section 383(1), parallel proceedings on the same issue are not carried out by income-tax authorities or the Appellate Tribunal.
Who does Section 385 apply to?
It applies to applicants who are residents and have made an application under Section 383(1) of the Act.
What is Section 383(1) referred to in Section 385?
Section 383(1) allows a resident applicant to apply for an advance ruling on certain tax matters. Section 385 ensures that issues under such applications are not adjudicated simultaneously elsewhere.
Can the Appellate Tribunal continue hearing a matter if a Section 383(1) application is filed on the same issue?
No, the Appellate Tribunal must not proceed to decide any issue that is already part of an application under Section 383(1).
Is there a specific timeframe within which the authorities must stop proceedings once an application under Section 383(1) is filed?
Section 385 does not prescribe a timeframe. It simply prohibits proceedings on the concerned issue once the application under Section 383(1) is made.
Does Section 385 apply only to individual taxpayers?
No, it applies to any resident applicant, not restricted to individuals.
Does this provision apply if the applicant is a non-resident?
No, Section 385 is specifically applicable to applicants who are residents.
What is the effect of this section on ongoing proceedings before income-tax authorities?
If an issue involved in an ongoing proceeding is also part of a Section 383(1) application, those proceedings must not continue on that issue.
Can income-tax authorities or the Tribunal reopen the issue after the advance ruling is given?
Section 385 only prevents adjudication while the application is pending. Actions post-ruling would depend on the binding nature of the advance ruling and other applicable provisions.
