Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Governs the making of an application — form and manner (Rule 44E and Form 34C/34D/34DA/34E; Rule 10 of the AAR (Procedure) Rules, 1996), in quadruplicate, with the prescribed fee (Rs.10,000 or such higher fee as prescribed); right to withdraw within thirty days [s.245Q(3)]; and transfer of pending applications to the Board for Advance Rulings [s.245Q(4)].
Finance Act, 2024: Sub-section (4) and its proviso (Act No. 15 of 2024, w.e.f. 1 October 2024) provide for transfer of pending applications to the Board, with a one-time right to request (by 31 October 2024) that a transferred application not be proceeded with if no s.245R(2) order had yet been passed.
Status: Moderately litigated on withdrawal, repeat applications and the (now-spent) Committee-on-Disputes clearance; admission bars are dealt with under s.245R. Authority rulings predominate.
A. SECTION COMMENTARY
1. The application and the fee
Section 245Q(1) entitles an “applicant” (as defined in s.245N(b)) to apply for an advance ruling in the prescribed form, stating the question on which the ruling is sought; the application is to be in quadruplicate and accompanied by the prescribed fee. The fee was raised from a nominal sum to Rs.10,000, with power to prescribe a higher, value-linked fee (e.g., a tiered fee for the high-value resident applicants notified under s.245N(a)(iia)). The application must disclose the full facts: an application that withholds material facts, or rests on incomplete or hypothetical premises, is liable to be dismissed (see Royal Bank of Canada and Meenu Sahi Mamik under s.245R).
2. Withdrawal — the thirty-day rule and the Authority’s discretion
Sub-section (3) confers an unconditional right to withdraw within thirty days of the application. Beyond thirty days, withdrawal is not a matter of right but of the Authority’s discretion; in practice the Authority has permitted withdrawal even after the close of hearing but before pronouncement, where justifiable reasons were shown. The discretion is exercised to prevent abuse of process — an applicant cannot withdraw merely to escape an adverse ruling foreshadowed at the hearing.
3. Repeat and successive applications
An applicant who allows an earlier application to be dismissed for default cannot re-agitate the same question by a fresh application on the merits (Yongnam Engineering). This is a facet of the discipline the forum imposes outside the express bars of s.245R(2) — abuse of process, laches and finality.
4. The Committee-on-Disputes clearance — now spent
For public-sector applicants, the Authority had at one time insisted on clearance from the Committee on Disputes before proceeding (Mahanagar Telephone Nigam). That requirement is now spent: the Supreme Court dismantled the CoD mechanism in Electronics Corporation of India Ltd v. Union of India (2011) 332 ITR 58 (SC). The MTNL ruling is retained for its historical statement of the practice, not as current law — a point flagged candidly.
5. Submission to the Assessing Officer’s jurisdiction
Where an applicant, instead of pressing the application, submits to the Assessing Officer’s jurisdiction and participates in assessment without raising the pendency of the AAR application, it may be precluded from thereafter proceeding with the application (Eplanet Ventures). The principle prevents parallel pursuit of the same question before two forums.
6. Transfer to the Board — the 2024 transitional provisos
Sub-section (4), inserted by the Finance Act, 2024 (w.e.f. 1 October 2024), transfers applications pending before the Authority (on which no s.245R(2) order had been passed and no s.245R(4) ruling pronounced before the notified date) to the Board for Advance Rulings, deeming the transferred record to be the record of the Board. The proviso gave a one-time exit: by 31 October 2024 the applicant could ask in writing that the transferred application not be proceeded with, provided the Board had not by then passed an order under s.245R(2). The matching power to treat such an application as withdrawn (by 31 December 2024) is in the fourth proviso to s.245R(2).
B. STATUTORY POSITION (verbatim text)
The text of section 245Q, as it stands in the Act (Finance Act, 2025 base text), is set out below.
245Q. (1) An applicant desirous of obtaining an advance ruling under this Chapter or under Chapter V of the Customs Act, 1962 (52 of 1962) or under Chapter IIIA of the Central Excise Act, 1944 (1 of 1944) or under Chapter VA of the Finance Act, 1994 (32 of 1994) may make an application in such form and in such manner as may be prescribed, stating the question on which the advance ruling is sought.
(2) The application shall be made in quadruplicate and be accompanied by a fee of ten thousand rupees or such fee as may be prescribed in this behalf, whichever is higher.
(3) An applicant may withdraw an application within thirty days from the date of the application.
(4) Where an application for advance ruling under this Chapter is made before such date as the Central Government may, by notification in the Official Gazette appoint, and in respect of which no order under sub-section (2) of section 245R has been passed or no advance ruling under sub-section (4) of section 245R has been pronounced before such date, such application along with all the relevant records, documents or material, by whatever name called, on the file of the Authority shall be transferred to the Board for Advance Rulings and shall be deemed to be the records before the Board for Advance Rulings for all purposes:
Provided that the applicant may, on or before the 31st day of October, 2024, request the Board for Advance Rulings in writing that the application so transferred may not be proceeded with, if up to the date of such request, the Board for Advance Rulings has not passed an order under sub-section (2) of section
Editorial note: sub-section (4) and its proviso were inserted by the Finance Act, 2024 (Act No. 15 of 2024) w.e.f. 1 October 2024 to effect transfer of pending applications to the Board for Advance Rulings.
C. AUTHORITIES
Authorities on form, withdrawal, repeat applications and submission to AO jurisdiction. The (spent) Committee-on-Disputes requirement is flagged as no longer good law. Admission bars are collected under s.245R.
Cluster 1 — Withdrawal and repeat applications
Yongnam Engineering & Construction (Pte) Ltd, In Re (2010) 321 ITR 442 (AAR)
Held: An applicant who allowed an earlier application to be dismissed for default cannot seek a fresh ruling on the merits on the same question.
Relevance: Finality/abuse-of-process discipline on successive applications under s.245Q.
Cluster 2 — Submission to the Assessing Officer’s jurisdiction
Eplanet Ventures Mauritius Ltd v. DIT (International Taxation) (2016) 74 taxmann.com 101 (Karnataka HC)
Held: Once the litigant has surrendered to the jurisdiction of the Assessing Officer — by not objecting to the assessment proceeding despite the pendency of the AAR application — it is precluded from thereafter proceeding with the application.
Relevance: Bars parallel pursuit of the same question before the AAR and the AO; a gloss on the election an applicant makes under s.245Q.
Cluster 3 — Public-sector applicants: Committee on Disputes (historical / now spent)
Retained for completeness; no longer good law after the Supreme Court abolished the CoD mechanism.
Mahanagar Telephone Nigam Ltd, In re (2005) 192 CTR 321 (AAR)
Held: A public-sector company required clearance from the Committee on Disputes before proceeding with an advance-ruling application.
Relevance: Historical practice only.
Electronics Corporation of India Ltd v. Union of India (2011) 332 ITR 58 (SC) — cognate
Held: The Committee-on-Disputes clearance mechanism (Oil & Natural Gas Commission line) was recalled and discontinued.
Relevance: Renders the CoD requirement in MTNL spent; flagged candidly so the reader does not rely on it as current law.
Cluster 4 — Completeness of the application (cross-reference)
Applications resting on incomplete facts or hypothetical premises are liable to dismissal — see Royal Bank of Canada (2010) 323 ITR 380 (AAR) and Meenu Sahi Mamik, In re (2007) 287 ITR 514 (AAR), collected under s.245R, Cluster 5.
Royal Bank of Canada, In re (2010) 323 ITR 380 (AAR) — see s.245R
Relevance: A s.245Q application must place complete facts; a ruling will not issue on a hypothetical/unsettled modus operandi.
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 245Q — Application for Advance Ruling
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Governs the making of an application — form and manner (Rule 44E and Form 34C/34D/34DA/34E; Rule 10 of the AAR (Procedure) Rules, 1996), in quadruplicate, with the prescribed fee (Rs.10,000 or such higher fee as prescribed); right to withdraw within thirty days [s.245Q(3)]; and transfer of pending applications to the Board for Advance Rulings [s.245Q(4)].
Finance Act, 2024: Sub-section (4) and its proviso (Act No. 15 of 2024, w.e.f. 1 October 2024) provide for transfer of pending applications to the Board, with a one-time right to request (by 31 October 2024) that a transferred application not be proceeded with if no s.245R(2) order had yet been passed.
Finance Act, 2026: No amendment to section 245Q.
Status: Moderately litigated on withdrawal, repeat applications and the (now-spent) Committee-on-Disputes clearance; admission bars are dealt with under s.245R. Authority rulings predominate.
A. SECTION COMMENTARY
1. The application and the fee
Section 245Q(1) entitles an “applicant” (as defined in s.245N(b)) to apply for an advance ruling in the prescribed form, stating the question on which the ruling is sought; the application is to be in quadruplicate and accompanied by the prescribed fee. The fee was raised from a nominal sum to Rs.10,000, with power to prescribe a higher, value-linked fee (e.g., a tiered fee for the high-value resident applicants notified under s.245N(a)(iia)). The application must disclose the full facts: an application that withholds material facts, or rests on incomplete or hypothetical premises, is liable to be dismissed (see Royal Bank of Canada and Meenu Sahi Mamik under s.245R).
2. Withdrawal — the thirty-day rule and the Authority’s discretion
Sub-section (3) confers an unconditional right to withdraw within thirty days of the application. Beyond thirty days, withdrawal is not a matter of right but of the Authority’s discretion; in practice the Authority has permitted withdrawal even after the close of hearing but before pronouncement, where justifiable reasons were shown. The discretion is exercised to prevent abuse of process — an applicant cannot withdraw merely to escape an adverse ruling foreshadowed at the hearing.
3. Repeat and successive applications
An applicant who allows an earlier application to be dismissed for default cannot re-agitate the same question by a fresh application on the merits (Yongnam Engineering). This is a facet of the discipline the forum imposes outside the express bars of s.245R(2) — abuse of process, laches and finality.
4. The Committee-on-Disputes clearance — now spent
For public-sector applicants, the Authority had at one time insisted on clearance from the Committee on Disputes before proceeding (Mahanagar Telephone Nigam). That requirement is now spent: the Supreme Court dismantled the CoD mechanism in Electronics Corporation of India Ltd v. Union of India (2011) 332 ITR 58 (SC). The MTNL ruling is retained for its historical statement of the practice, not as current law — a point flagged candidly.
5. Submission to the Assessing Officer’s jurisdiction
Where an applicant, instead of pressing the application, submits to the Assessing Officer’s jurisdiction and participates in assessment without raising the pendency of the AAR application, it may be precluded from thereafter proceeding with the application (Eplanet Ventures). The principle prevents parallel pursuit of the same question before two forums.
6. Transfer to the Board — the 2024 transitional provisos
Sub-section (4), inserted by the Finance Act, 2024 (w.e.f. 1 October 2024), transfers applications pending before the Authority (on which no s.245R(2) order had been passed and no s.245R(4) ruling pronounced before the notified date) to the Board for Advance Rulings, deeming the transferred record to be the record of the Board. The proviso gave a one-time exit: by 31 October 2024 the applicant could ask in writing that the transferred application not be proceeded with, provided the Board had not by then passed an order under s.245R(2). The matching power to treat such an application as withdrawn (by 31 December 2024) is in the fourth proviso to s.245R(2).
B. STATUTORY POSITION (verbatim text)
The text of section 245Q, as it stands in the Act (Finance Act, 2025 base text), is set out below.
245Q. (1) An applicant desirous of obtaining an advance ruling under this Chapter or under Chapter V of the Customs Act, 1962 (52 of 1962) or under Chapter IIIA of the Central Excise Act, 1944 (1 of 1944) or under Chapter VA of the Finance Act, 1994 (32 of 1994) may make an application in such form and in such manner as may be prescribed, stating the question on which the advance ruling is sought.
(2) The application shall be made in quadruplicate and be accompanied by a fee of ten thousand rupees or such fee as may be prescribed in this behalf, whichever is higher.
(3) An applicant may withdraw an application within thirty days from the date of the application.
(4) Where an application for advance ruling under this Chapter is made before such date as the Central Government may, by notification in the Official Gazette appoint, and in respect of which no order under sub-section (2) of section 245R has been passed or no advance ruling under sub-section (4) of section 245R has been pronounced before such date, such application along with all the relevant records, documents or material, by whatever name called, on the file of the Authority shall be transferred to the Board for Advance Rulings and shall be deemed to be the records before the Board for Advance Rulings for all purposes:
Provided that the applicant may, on or before the 31st day of October, 2024, request the Board for Advance Rulings in writing that the application so transferred may not be proceeded with, if up to the date of such request, the Board for Advance Rulings has not passed an order under sub-section (2) of section
Editorial note: sub-section (4) and its proviso were inserted by the Finance Act, 2024 (Act No. 15 of 2024) w.e.f. 1 October 2024 to effect transfer of pending applications to the Board for Advance Rulings.
C. AUTHORITIES
Authorities on form, withdrawal, repeat applications and submission to AO jurisdiction. The (spent) Committee-on-Disputes requirement is flagged as no longer good law. Admission bars are collected under s.245R.
Cluster 1 — Withdrawal and repeat applications
Yongnam Engineering & Construction (Pte) Ltd, In Re (2010) 321 ITR 442 (AAR)
Held: An applicant who allowed an earlier application to be dismissed for default cannot seek a fresh ruling on the merits on the same question.
Relevance: Finality/abuse-of-process discipline on successive applications under s.245Q.
Cluster 2 — Submission to the Assessing Officer’s jurisdiction
Eplanet Ventures Mauritius Ltd v. DIT (International Taxation) (2016) 74 taxmann.com 101 (Karnataka HC)
Held: Once the litigant has surrendered to the jurisdiction of the Assessing Officer — by not objecting to the assessment proceeding despite the pendency of the AAR application — it is precluded from thereafter proceeding with the application.
Relevance: Bars parallel pursuit of the same question before the AAR and the AO; a gloss on the election an applicant makes under s.245Q.
Cluster 3 — Public-sector applicants: Committee on Disputes (historical / now spent)
Retained for completeness; no longer good law after the Supreme Court abolished the CoD mechanism.
Mahanagar Telephone Nigam Ltd, In re (2005) 192 CTR 321 (AAR)
Held: A public-sector company required clearance from the Committee on Disputes before proceeding with an advance-ruling application.
Relevance: Historical practice only.
Electronics Corporation of India Ltd v. Union of India (2011) 332 ITR 58 (SC) — cognate
Held: The Committee-on-Disputes clearance mechanism (Oil & Natural Gas Commission line) was recalled and discontinued.
Relevance: Renders the CoD requirement in MTNL spent; flagged candidly so the reader does not rely on it as current law.
Cluster 4 — Completeness of the application (cross-reference)
Applications resting on incomplete facts or hypothetical premises are liable to dismissal — see Royal Bank of Canada (2010) 323 ITR 380 (AAR) and Meenu Sahi Mamik, In re (2007) 287 ITR 514 (AAR), collected under s.245R, Cluster 5.
Royal Bank of Canada, In re (2010) 323 ITR 380 (AAR) — see s.245R
Relevance: A s.245Q application must place complete facts; a ruling will not issue on a hypothetical/unsettled modus operandi.
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.