In the last article, we have discussed the “Concept of Advance Ruling under Income Tax Act’ 1961.” We have already discussed who can seek the advance ruling.
In this article, we will discuss how to make an application before the AAR for seeking the advance ruling.
Application for Advance Ruling:
The applicant desirous of obtaining advance ruling may make an application stating the question on which advance ruling is sought.
Questions on which Advance Ruling can be sought:
Form for Filing Application:
The applicant may seek the advance ruling by making an application to the Authority in the prescribed form.
Rule-44E of the Income Tax Rules’1962 prescribes forms for filing the application. The application shall be made in quadruplicate in the below-prescribed forms:
|Non-Resident Applicant.||Form No.34C|
|The resident having transactions with a non-resident.||Form 34D|
|Resident seeking the advance ruling in relation to his tax liability arising out of one or more transactions valuing Rs.100 crore or more in total which has been undertaken or proposed to be undertaken by him.||Form No.34DA|
|Public Sector Company as notified by the government via Notification No.11456, dated 3/8/2000.||Form No.34E|
|For determining whether an arrangement is an impermissible avoidance arrangement as referred to in Chapter X-A or not.||Form No.34EA|
Fees for filing Application:
The application shall be accompanied by a fee of ten thousand rupees or such fee as may be prescribed in this behalf, whichever is higher.
Rule 44E of the Income Tax Rules’1962 prescribes fees payable while making the application before the authority for the advance ruling. The fees payable along with the application for the advance ruling shall be in accordance with the following table:
|A non-resident applicant.
A resident seeking the advance ruling in relation to the tax liability of a non-resident arising out of transaction undertaken or proposed to be undertaken by him with a non-resident.
A resident seeking the advance ruling in relation to his tax liability arising out of one or more transactions valuing Rs.100 crore or more in total which has been undertaken or is proposed to be undertaken by him.
|Amount of one or more transaction entered into or proposed to be undertaken, in respect of which ruling is sought does not exceed Rs. 100 crore.||Rs. 2 Lacs|
|Amount of one or more transaction entered into or proposed to be undertaken, in respect of which ruling is sought exceeds Rs. 100 crore but does not exceed Rs. 300 crore.||Rs. 5 Lacs|
|Amount of one or more transaction entered into or proposed to be undertaken, in respect of which ruling is sought exceeds Rs. 300 crore.||Rs. 10 Lacs|
|Any other applicant||In all cases||Rs. 10,000|
The application is to be accompanied by an account-payee demand draft for 10,000 Indian rupees drawn in favor of the Authority for Advance Ruling and made payable at New Delhi.
Signing of Application:
The application, the verification appended thereto, the annexures to the said application and the statements and documents accompanying it, shall be signed.
|Individual||– By the individual himself.
– If individual is unable to sign, the person duly holding Power of Attorney from the individual to do so. Power of Attorney shall also be attached to the application.
|Hindu Undivided Family||– By the Karta.
– Where it is not possible for the karta to sign the application, by any other adult member of such family.
|Company||– By the Managing Director
– Where there is no managing director, by any director thereof.
– Where it is not possible by Managing Director and director, by any person duly authorized by the company in this behalf. Power of Attorney shall also be attached to the application.
|Firm||– By Managing Partner.
– Where there is no managing partner, by any partner thereof, not being a minor.
|Association of Persons||– By any member of the association or the principal officer thereof.|
|Any Other Person||– By that person or by some person competent to act on his behalf.|
Withdrawal of Application:
An applicant may withdraw an application within thirty days from the date of the application.