Section 245-OA — Qualifications, Terms and Conditions of Service of Chairman, Vice-Chairman and Member
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Inserted by the Finance Act, 2017 (Part XIV of Chapter VI). Notwithstanding anything in the Act, the qualifications, appointment, term of office, salaries, resignation and removal of the Chairman, Vice-Chairman and Members appointed after the commencement of Part XIV of Chapter VI of the Finance Act, 2017 are governed by s.184 of that Finance Act (and the rules framed thereunder); those appointed earlier remain governed by the Income-tax Act.
Finance Act, 2026: No amendment to section 245-OA.
Status: No direct merits ruling on s.245-OA. Its operative engine — s.184 of the Finance Act, 2017 and the Tribunal Rules made under it — has been the subject of landmark constitutional litigation (Rojer Mathew; Madras Bar Association), which governs how appointments under s.245-OA must be made. Candour rule applied; cognate constitutional authority supplied.
A. SECTION COMMENTARY
1. Function of the section
Section 245-OA is a conduit provision. It does not itself spell out qualifications or tenure; it imports, for the income-tax Authority’s Chairman, Vice-Chairman and Members appointed after the Finance Act, 2017 came into force, the common tribunal-service regime in s.184 of that Finance Act — the provision under which the Central Government framed uniform rules on qualification, appointment, tenure, salaries and removal across some nineteen tribunals. A proviso grandfathers earlier appointees under the old Income-tax Act regime.
2. Why the borrowed regime matters — the constitutional litigation on s.184
Because s.245-OA fastens the Authority’s composition to s.184 of the Finance Act, 2017, the validity of appointments to the Authority rises and falls with the validity of the s.184 rules. Those rules have twice been struck down. In Rojer Mathew the Constitution Bench held the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and Other Conditions of Service of Members) Rules, 2017 to be contrary to the constitutional principles of judicial independence and separation of powers, and remitted the matter for fresh rule-making; in Madras Bar Association (2021) the Court again read down/struck portions of the successor 2020 Rules and laid down binding directions on tenure, age and selection-committee composition. These decisions are the operative law controlling who may sit on the Authority (and, by extension, the Board) and on what terms.
3. Lineage — tribunalisation jurisprudence
The s.184 line descends from the Court’s tribunalisation jurisprudence: L. Chandra Kumar (judicial review by High Courts is part of the basic structure and cannot be wholly displaced by tribunals) and Union of India v. R. Gandhi (Madras Bar Association) (members of a body discharging judicial functions must possess judicial attributes and independence comparable to the courts they replace). Applied to s.245-OA, these principles require that the Authority’s judicial members be selected and protected in a manner preserving independence — a requirement directly engaged when the function migrates to a departmental Board for Advance Rulings under s.245-OB.
4. Candour
No reported decision construes s.245-OA itself. The section is best understood through the constitutional jurisprudence on its borrowed engine, set out below. The reader should treat that jurisprudence as governing the manner of appointment under s.245-OA, not as a direct interpretation of the section’s text.
B. STATUTORY POSITION (verbatim text)
The text of section 245-OA, as it stands in the Act (Finance Act, 2025 base text), is set out below.
245-OA. Notwithstanding anything contained in this Act, the qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the Chairman, Vice-Chairman and other Members of the Authority appointed after the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall be governed by the provisions of section 184 of that Act:
Provided that the Chairman, Vice-Chairman and Member appointed before the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall continue to be governed by the provisions of this Act and the rules made thereunder as if the provisions of section 184 of the Finance Act, 2017 had not come into force.
Editorial note: the section operates by reference to s.184 of the Finance Act, 2017; the validity of appointments thereunder is governed by the constitutional decisions collected below.
C. AUTHORITIES
Candour rule: there is no merits authority on s.245-OA. The cognate authorities below govern the constitutional validity of the s.184 (Finance Act, 2017) regime that s.245-OA incorporates, and are the nearest governing law.
Cluster 1 — Validity of the s.184 (Finance Act, 2017) tribunal-service regime
Rojer Mathew v. South Indian Bank Ltd (2020) 6 SCC 1 (SC, Constitution Bench)
Held: The Tribunal Rules, 2017 framed under s.184 of the Finance Act, 2017 were struck down as inconsistent with judicial independence and separation of powers; the Court directed fresh rules and laid down norms on qualifications, tenure and selection.
Relevance: Directly controls appointments to the Authority under s.245-OA, which imports s.184.
Madras Bar Association v. Union of India (2021) 7 SCC 369 (SC)
Held: Reviewing the Tribunal Reforms rules, the Court read down/struck provisions on minimum tenure, minimum age (51 years) and selection-committee composition, issuing binding directions to secure independence.
Relevance: Supplies the operative norms for terms and conditions of service under s.245-OA.
Cluster 2 — Tribunalisation first principles
Union of India v. R. Gandhi, President, Madras Bar Association (2010) 11 SCC 1 (SC)
Held: A body vested with judicial functions formerly discharged by courts must be staffed by members possessing judicial attributes and independence; executive dominance in selection/qualification is impermissible.
Relevance: Foundational principle behind the s.245-OA qualification regime and the migration to the Board.
L. Chandra Kumar v. Union of India (1997) 3 SCC 261 (SC, 7-Judge Bench)
Held: Judicial review by the High Courts under Art. 226/227 is part of the basic structure and cannot be ousted; tribunals are supplemental, not substitutes, and remain subject to High Court superintendence.
Relevance: Explains why advance rulings remain reviewable (s.245W appeal/writ) notwithstanding any “finality” — the constitutional backdrop to s.245-OA and s.245W.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; no statutory word is altered. Chapter XIX-B (Advance Rulings, ss.245N–245W) was inserted by the Finance Act, 1993; the Authority for Advance Rulings was replaced, for fresh income-tax applications, by the Board for Advance Rulings (s.245-OB, Finance Act, 2021), with a statutory appeal to the High Court (s.245W) and the e-Advance Rulings Scheme, 2022. The Finance Act, 2026 makes NO amendment to any section of Chapter XIX-B. Rulings of the Authority for Advance Rulings are cited as the natural body of jurisprudence on this Chapter; Supreme Court and High Court decisions are flagged as such; there is virtually no Income-tax Appellate Tribunal authority on Chapter XIX-B (advance-ruling disputes travel to the High Court/Supreme Court, not the Tribunal), which is stated candidly rather than padded. Where a section has not been judicially construed, that is stated and the nearest governing authority is given. Citations are stated as reported and have been web-verified; the reader should consult the official report before filing. This material is for professional reference and is not legal advice.
CHAPTER XIX-B — ADVANCE RULINGS
Section 245-OA — Qualifications, Terms and Conditions of Service of Chairman, Vice-Chairman and Member
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Inserted by the Finance Act, 2017 (Part XIV of Chapter VI). Notwithstanding anything in the Act, the qualifications, appointment, term of office, salaries, resignation and removal of the Chairman, Vice-Chairman and Members appointed after the commencement of Part XIV of Chapter VI of the Finance Act, 2017 are governed by s.184 of that Finance Act (and the rules framed thereunder); those appointed earlier remain governed by the Income-tax Act.
Finance Act, 2026: No amendment to section 245-OA.
Status: No direct merits ruling on s.245-OA. Its operative engine — s.184 of the Finance Act, 2017 and the Tribunal Rules made under it — has been the subject of landmark constitutional litigation (Rojer Mathew; Madras Bar Association), which governs how appointments under s.245-OA must be made. Candour rule applied; cognate constitutional authority supplied.
A. SECTION COMMENTARY
1. Function of the section
Section 245-OA is a conduit provision. It does not itself spell out qualifications or tenure; it imports, for the income-tax Authority’s Chairman, Vice-Chairman and Members appointed after the Finance Act, 2017 came into force, the common tribunal-service regime in s.184 of that Finance Act — the provision under which the Central Government framed uniform rules on qualification, appointment, tenure, salaries and removal across some nineteen tribunals. A proviso grandfathers earlier appointees under the old Income-tax Act regime.
2. Why the borrowed regime matters — the constitutional litigation on s.184
Because s.245-OA fastens the Authority’s composition to s.184 of the Finance Act, 2017, the validity of appointments to the Authority rises and falls with the validity of the s.184 rules. Those rules have twice been struck down. In Rojer Mathew the Constitution Bench held the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and Other Conditions of Service of Members) Rules, 2017 to be contrary to the constitutional principles of judicial independence and separation of powers, and remitted the matter for fresh rule-making; in Madras Bar Association (2021) the Court again read down/struck portions of the successor 2020 Rules and laid down binding directions on tenure, age and selection-committee composition. These decisions are the operative law controlling who may sit on the Authority (and, by extension, the Board) and on what terms.
3. Lineage — tribunalisation jurisprudence
The s.184 line descends from the Court’s tribunalisation jurisprudence: L. Chandra Kumar (judicial review by High Courts is part of the basic structure and cannot be wholly displaced by tribunals) and Union of India v. R. Gandhi (Madras Bar Association) (members of a body discharging judicial functions must possess judicial attributes and independence comparable to the courts they replace). Applied to s.245-OA, these principles require that the Authority’s judicial members be selected and protected in a manner preserving independence — a requirement directly engaged when the function migrates to a departmental Board for Advance Rulings under s.245-OB.
4. Candour
No reported decision construes s.245-OA itself. The section is best understood through the constitutional jurisprudence on its borrowed engine, set out below. The reader should treat that jurisprudence as governing the manner of appointment under s.245-OA, not as a direct interpretation of the section’s text.
B. STATUTORY POSITION (verbatim text)
The text of section 245-OA, as it stands in the Act (Finance Act, 2025 base text), is set out below.
245-OA. Notwithstanding anything contained in this Act, the qualifications, appointment, term of office, salaries and allowances, resignation, removal and the other terms and conditions of service of the Chairman, Vice-Chairman and other Members of the Authority appointed after the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall be governed by the provisions of section 184 of that Act:
Provided that the Chairman, Vice-Chairman and Member appointed before the commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall continue to be governed by the provisions of this Act and the rules made thereunder as if the provisions of section 184 of the Finance Act, 2017 had not come into force.
Editorial note: the section operates by reference to s.184 of the Finance Act, 2017; the validity of appointments thereunder is governed by the constitutional decisions collected below.
C. AUTHORITIES
Candour rule: there is no merits authority on s.245-OA. The cognate authorities below govern the constitutional validity of the s.184 (Finance Act, 2017) regime that s.245-OA incorporates, and are the nearest governing law.
Cluster 1 — Validity of the s.184 (Finance Act, 2017) tribunal-service regime
Rojer Mathew v. South Indian Bank Ltd (2020) 6 SCC 1 (SC, Constitution Bench)
Held: The Tribunal Rules, 2017 framed under s.184 of the Finance Act, 2017 were struck down as inconsistent with judicial independence and separation of powers; the Court directed fresh rules and laid down norms on qualifications, tenure and selection.
Relevance: Directly controls appointments to the Authority under s.245-OA, which imports s.184.
Madras Bar Association v. Union of India (2021) 7 SCC 369 (SC)
Held: Reviewing the Tribunal Reforms rules, the Court read down/struck provisions on minimum tenure, minimum age (51 years) and selection-committee composition, issuing binding directions to secure independence.
Relevance: Supplies the operative norms for terms and conditions of service under s.245-OA.
Cluster 2 — Tribunalisation first principles
Union of India v. R. Gandhi, President, Madras Bar Association (2010) 11 SCC 1 (SC)
Held: A body vested with judicial functions formerly discharged by courts must be staffed by members possessing judicial attributes and independence; executive dominance in selection/qualification is impermissible.
Relevance: Foundational principle behind the s.245-OA qualification regime and the migration to the Board.
L. Chandra Kumar v. Union of India (1997) 3 SCC 261 (SC, 7-Judge Bench)
Held: Judicial review by the High Courts under Art. 226/227 is part of the basic structure and cannot be ousted; tribunals are supplemental, not substitutes, and remain subject to High Court superintendence.
Relevance: Explains why advance rulings remain reviewable (s.245W appeal/writ) notwithstanding any “finality” — the constitutional backdrop to s.245-OA and s.245W.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; no statutory word is altered. Chapter XIX-B (Advance Rulings, ss.245N–245W) was inserted by the Finance Act, 1993; the Authority for Advance Rulings was replaced, for fresh income-tax applications, by the Board for Advance Rulings (s.245-OB, Finance Act, 2021), with a statutory appeal to the High Court (s.245W) and the e-Advance Rulings Scheme, 2022. The Finance Act, 2026 makes NO amendment to any section of Chapter XIX-B. Rulings of the Authority for Advance Rulings are cited as the natural body of jurisprudence on this Chapter; Supreme Court and High Court decisions are flagged as such; there is virtually no Income-tax Appellate Tribunal authority on Chapter XIX-B (advance-ruling disputes travel to the High Court/Supreme Court, not the Tribunal), which is stated candidly rather than padded. Where a section has not been judicially construed, that is stated and the nearest governing authority is given. Citations are stated as reported and have been web-verified; the reader should consult the official report before filing. This material is for professional reference and is not legal advice.