Page 87 - DHC Budget Book 2021-22 Final
P. 87

   7.13
Substitution of ‘Authority for Advance Rulings’ with ‘Board for Advance Rulings’ [Sec. 245N, Sec. 245-O, Sec. 245-OB, Sec. 245P, Sec. 245Q, Sec. 245R, Sec. 245S, Sec. 245T, Sec. 245U, Sec. 245W] [w.r.e.f. 01-04-2021]
 — As per the existing provisions, persons eligible for appointment as Chairman/ Vice-Chairman
of a bench of AAR are retired judges of the Supreme Court, retired Chief Justice of a High Court or retired Judge of a High Court. The working of AAR has been seriously hampered due to vacancy in the post of Chairman and Vice-Chairman on account of non-availability of persons eligible for appointment to such posts. With a view to provide rulings in a timely manner, it is proposed to replace the AAR by the ‘Board for Advance Rulings’ (‘BoAR’) from a date as may be notified (‘notified date’).
— Sec. 245-O is proposed to be amended to provide that the AAR shall cease to operate w.e.f. the notified date. Consequently, Sec. 245-OB is proposed to be inserted to provide constitution of one or more BoAR which shall consist of two members, each being an officer not below the rank of CCIT.
— Sec. 245Q which provides for the procedure
of filing application for advance ruling is proposed to be amended to provide for transfer of applications along with all relevant records, documents or material from the AAR to the BoAR where such applications are pending before the AAR before the notified date.
— Sec. 245R which provides for the procedure to be followed for giving advance rulings is proposed to be amended to replace reference
— Sec. 234C provides for levy of interest liability on deferment of payment of advance tax.
— The first proviso to sub-section (1) of Sec. 234C provides for categories of incomes for which there will be no charge of interest under the said section, in the event of failure to estimate such incomes resulting in a shortfall in the advance tax payments provided requisite advance tax is paid in the subsequent advance tax instalments.
— Hitherto, Clause (d) of the first proviso provided for relaxation in respect of dividend income referred to in Sec. 115BBDA. It is now proposed to substitute clause (d) of the said first proviso
to AAR with the BoAR w.e.f. the notified date.
It is also proposed to introduce a new Scheme so as to impart greater efficiency, transparency and accountability for the purposes of giving advance rulings by eliminating interface between the applicant and the BoAR.
— As per the existing provisions of Sec. 245S, the ruling of an AAR is binding on the applicant as well as on the Department with respect to the transaction in relation to which the advance ruling has been sought. Now, Sec. 245S is proposed to be amended to do away with the binding nature of advance rulings and Sec. 245W is proposed to be inserted to provide for filing of appeal before the High Court against any Ruling of the BoAR by the applicant as well as the Department.
— Consequential amendments are also proposed in Sec. 245N, 245P, 245R, 245T, 245U to replace reference to AAR with BoAR and to provide
that the existing provisions shall apply mutatis mutandi to the BoAR.
Comments
— The AAR has been proposed to be substituted with the BoAR to ensure expeditious processing of applications for advance rulings. However, the amendment providing for filing of appeals before the High Court against the rulings of the BoAR may lead to increased litigation and uncertainty relating to rulings pronounced by the BoAR.
to provide relaxation in respect of all dividend income excluding deemed dividend u/s 2(22)(e).
Comments
— Aforesaid relaxation is to insulate the taxpayers from payment of interest u/s 234C where accurate determination of advance tax liability is not possible due to the intrinsic nature of the income. Now, assessee can compute advance tax liability without considering the impact of probable dividend income which has not been declared/paid by the company in the relevant quarter.
   7.14
 Non-levy of interest u/s 234C for any shortfall in Advance Tax on account of Dividend Income [Sec. 234C] [w.r.e.f. AY 2021-22]
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