Section 245R of Income Tax Act for AY 2023-24

Section 245R of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Procedure on receipt of application.

Amended and updated notes on section 245R of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Procedure on receipt of application.

Chapter XIXB (Sections 245N to 245V) of the Income Tax Act 1961 deals with the provisions related to Advance rulings . Section 245R of IT Act 1961 provides for Procedure on receipt of application.

Recently, we have discussed in detail section 245Q (Application for advance ruling) of IT Act 1961. Today, we learn the provisions of section 245R of Income-tax Act 1961. The amended provision of section 245R is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 245R of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.

Section-245R: Procedure on receipt of application

Section 245R(1) of Income Tax Act

On receipt of an application, the Authority shall cause a copy thereof to be forwarded to the Principal Commissioner or Commissioner and, if necessary, call upon him to furnish the relevant records :

Provided that where any records have been called for by the Authority in any case, such records shall, as soon as possible, be returned to the Principal Commissioner or Commissioner.

Section 245R(2) of Income Tax Act

The Authority may, after examining the application and the records called for, by order, either allow or reject the application :

Provided that the Authority shall not allow the application where the question raised in the application,—

  • (i) is already pending before any income-tax authority or Appellate Tribunal [except in the case of a resident applicant falling in sub-clause (iii) of clause (b) of section 245N] or any court;
  • (ii) involves determination of fair market value of any property;
  • (iii) 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 sub-clause (iii) of clause (b) of section 245N or in the case of an applicant falling in sub-clause (iiia) of clause (b) of section 245N]:

Provided further that no application shall be rejected under this sub-section unless an opportunity has been given to the applicant of being heard:

Provided also that where the application is rejected, reasons for such rejection shall be given in the order.

Section 245R(3) of Income Tax Act

A copy of every order made under sub-section (2) shall be sent to the applicant and to the Principal Commissioner or Commissioner.

Section 245R(4) of Income Tax Act

Where an application is allowed under sub-section (2), the Authority shall, after examining such further material as may be placed before it by the applicant or obtained by the Authority, pronounce its advance ruling on the question specified in the application.

Section 245R(5) of Income Tax Act

On a request received from the applicant, the Authority shall, before pronouncing its advance ruling, provide an opportunity to the applicant of being heard, either in person or through a duly authorised representative.

Explanation: For the purposes of this sub-section, “authorised representative” shall have the meaning assigned to it in sub-section (2) of section 288, as if the applicant were an assessee.

Section 245R(6) of Income Tax Act

The Authority shall pronounce its advance ruling in writing within six months of the receipt of application.

Section 245R(7) of Income Tax Act

A copy of the advance ruling pronounced by the Authority, duly signed by the Members and certified in the prescribed manner shall be sent to the applicant and to the Principal Commissioner or Commissioner, as soon as may be, after such pronouncement.

Section 245R(8) of Income Tax Act

On and from such date as the Central Government may, by notification in the Official Gazette, appoint, the provisions of this section shall have effect as if for the word “Authority”, the words “Board for Advance Rulings” had been substituted and the provisions of this section shall apply mutatis mutandis to the Board for Advance Rulings as they apply to the Authority.

[Sub-section(8) of section 245R newly inserted w.e.f. 1-April-2021 by the Finance Act 2021]

[The Central Government appoints 1st day of September, 2021 as the date for the purposes of sub-section (8) of section 245R vide Notification No. 97/2021, S.O. 3562(E) dated 01.09.2021]

Section 245R(9) of Income Tax Act

The Central Government may, by notification in the Official Gazette, make a scheme for the purposes of giving advance rulings under this Chapter by the Board for Advance Rulings, so as to impart greater efficiency, transparency and accountability by—

  • (a) eliminating the interface between the Board for Advance Rulings and the applicant in the course of proceedings to the extent technologically feasible;
  • (b) optimising utilisation of the resources through economies of scale and functional specialisation;
  • (c) introducing a system with dynamic jurisdiction.

[Sub-section(9) of section 245R newly inserted w.e.f. 1-April-2021 by the Finance Act 2021]

Section 245R(10) of Income Tax Act

The Central Government may, for the purposes of giving effect to the scheme made under sub-section (9), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the said notification:

Provided that no such direction shall be issued after the 31st day of March, 2023.

[Sub-section(10) of section 245R newly inserted w.e.f. 1-April-2021 by the Finance Act 2021]

Section 245R(11) of Income Tax Act

Every notification issued under sub-section (9) and sub-section (10) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.

[Sub-section(11) of section 245R newly inserted w.e.f. 1-April-2021 by the Finance Act 2021]


Open Demat Account

For Investing or Trading

(Best Investing and Trading Platform in India)

Learn More