No need for in-person appearance in Income Tax Advance Ruling hearing, e-mechanism notified

The Finance Ministry has come out with ‘e-advance rulings scheme’ for resolving issues related with income tax.

Advance Ruling means written opinion or authoritative decision by an Authority empowered to render it with regard to the tax consequences of a transaction or proposed transaction or an assessment in regard thereto. It has been defined in section 245N(a) of the Income-tax Act, 1961. An independent adjudicatory body, headed by a retired judge of the Supreme Court has is empowered to issue rulings, which are binding both on the Income-tax Department and the applicant. Income Tax Department says the procedure prescribed is simple, inexpensive, expeditious and authoritative.

Now, the new e-scheme will enable taxpayers to file their application for advance ruling through e-mail. It, further provides that hearing before the Board for Advance Rulings will be conducted through video conferencing/ video telephony, where taxpayers would be granted appropriate opportunity of being heard. Here all communications between the taxpayer/ Income tax authorities and Board for Advance Rulings shall take place in electronic mode.

Post implementation of the scheme, the applicant will not be required to appear either personally or through authorised representative in connection with any proceedings under this Scheme before the Board for Advance Rulings or before the Secretary, ministerial staff, executive or consultant posted with the Board for Advance Rulings. An appeal against an order for advance ruling passed by the Board for Advance Rulings under this Scheme shall lie before the High Court.

The proceedings before the Board for Advance Rulings will not be open to the public and no person (other than the applicant, his employee, the concerned officers of the Board for Advance Rulings or the Income-tax authority or the authorised representatives) will, without the permission of the Board, remain present during such proceedings, even on video conferencing or video telephony

Step towards e-governance

Rakesh Nangia, Chairman with Nangia Andersen India, sees this as one step forward to implementing e-Governance and to reduce personal interaction between Income tax department and taxpayers, Considering majority of applicants for an advance ruling are non-residents situated outside India, such e-Advance Ruling scheme for making application, all correspondences through e-mail/ electronic mode and also conducting hearings through video conferencing would help non-resident applicants participate in these proceedings through electronic mode without need to travel physically. However, “implementation will be key to success of the scheme and the authorities would need to ensure that adequate opportunity of hearing, albeit through video conferencing, is provided to the applicants,” he cautioned.

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