Section 245T — Advance Ruling to be Void in Certain Circumstances
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Empowers the Authority, on a representation by the Principal Commissioner/Commissioner or otherwise, to declare a ruling void ab initio where it was obtained by fraud or misrepresentation of facts; on such declaration the Act applies as if the ruling had never been made (excluding the period from the ruling to the s.245T order). Sub-section (3) substitutes “Board for Advance Rulings” from a notified date.
Status: No direct merits ruling reported on s.245T. Candour rule applied. The provision parallels s.245D(7)/(6) of the Settlement scheme; cognate authority on fraud/misrepresentation and on the avoidance enquiry (where a substance-less structure is exposed) is supplied.
A. SECTION COMMENTARY
1. A fraud-unravelling power
Section 245T is the integrity safeguard of the Chapter. A ruling, though otherwise binding under s.245S, is liable to be declared void ab initio if obtained by fraud or misrepresentation of facts. The consequence is drastic: the ruling is treated as never made, and the Act applies to the applicant accordingly, with the intervening period excluded from limitation. The power may be set in motion by a representation from the Commissioner or by the Authority of its own motion; Rule 23 of the AAR (Procedure) Rules requires the representation to be supported by a statement of facts and evidence of the fraud or misrepresentation.
2. Parallel with the Settlement scheme
The provision is the advance-ruling analogue of s.245D(6) (settlement void if obtained by fraud or misrepresentation) in Chapter XIX-A. The settled construction of that cognate power is instructive: the Supreme Court in Om Prakash Mittal held that a settlement obtained by fraud or misrepresentation is rightly declared void, the test being whether material facts were suppressed or false facts presented. The same approach governs s.245T — it is the procurement of the ruling by deception, not mere subsequent disagreement with it, that triggers avoidance.
3. Overlap with the avoidance enquiry
Where a ruling is obtained by presenting a structure as having commercial substance which in truth it lacks, the line between the s.245R(2)(iii) avoidance bar (operating at admission) and the s.245T void-for-misrepresentation power (operating after a ruling) can converge. The substance-over-form reasoning of Groupe Industrial Marcel Dassault and, at the apex level, Tiger Global (2026) — where a Tax Residency Certificate was held not conclusive and the real ownership/control of a paper structure was examined — illustrates the kind of misrepresentation of facts that could ground a s.245T declaration had a ruling been procured on a false factual premise.
4. Candour
No reported decision applies s.245T directly. The fraud principle and the cognate s.245D(6) authority below are the nearest governing law; they are offered as cognate, not as direct construction of s.245T.
B. STATUTORY POSITION (verbatim text)
The text of section 245T, as it stands in the Act (Finance Act, 2025 base text), is set out below.
245T. (1) Where the Authority finds, on a representation made to it by the Principal Commissioner or Commissioner or otherwise, that an advance ruling pronounced under sub-section (6) of section 245R has been obtained by the applicant by fraud or misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the provisions of this Act shall apply (after excluding the period beginning with the date of such advance ruling and ending with the date of order under this sub-section) to the applicant as if such advance ruling had never been made.
(2) A copy of the order made under sub-section (1) shall be sent to the applicant and the Principal Commissioner or Commissioner.
(3) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint, the provisions of this section shall have effect as if for the word "Authority", the words "Board for Advance Rulings" had been substituted.
Editorial note: section 245T parallels the void-for-fraud power in s.245D(6) of Chapter XIX-A; Rule 23 of the AAR (Procedure) Rules, 1996 prescribes the procedure.
C. AUTHORITIES
Candour rule: no direct authority on s.245T. The cognate authorities below state the fraud/misrepresentation principle (general and under the parallel Settlement provision) and the substance enquiry that exposes a false factual premise.
Cluster 1 — Fraud / misrepresentation: general and cognate (s.245D)
S.P. Chengalvaraya Naidu v. Jagannath (1994) 1 SCC 1 (SC)
Held: Fraud vitiates the most solemn proceedings; a judgment or order obtained by fraud is a nullity and may be treated as non-est.
Relevance: The first principle behind s.245T — a ruling procured by fraud is void ab initio.
Om Prakash Mittal v. CIT (2005) 273 ITR 326 (SC) — cognate (s.245D(6))
Held: A settlement obtained by fraud or misrepresentation of facts is rightly declared void; suppression of material facts or presentation of false facts is the touchstone.
Relevance: Construes the parallel void-for-fraud power; the same test governs s.245T.
Cluster 2 — Exposure of a false/substance-less factual premise (cognate)
Authority for Advance Rulings (Income Tax) v. Tiger Global International II Holdings, 2026 INSC 60 (SC, 15 January 2026)
Held: A TRC is not conclusive of substance; the forum may examine the real control, management and ownership of an arrangement (full note under s.245R).
Relevance: Illustrates the kind of misrepresentation of facts (a structure presented as substantive but in truth a conduit) that could found a s.245T declaration if a ruling were procured on it.
Groupe Industrial Marcel Dassault, In re (2012) 340 ITR 353 (AAR)
Held: An interposed entity with no office, employees, business or assets was a substance-less front; a valid form used as a smokescreen to avoid tax was not protected.
Relevance: Cognate on the factual misrepresentation/colourable-device theme underlying s.245T.
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 245T — Advance Ruling to be Void in Certain Circumstances
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Empowers the Authority, on a representation by the Principal Commissioner/Commissioner or otherwise, to declare a ruling void ab initio where it was obtained by fraud or misrepresentation of facts; on such declaration the Act applies as if the ruling had never been made (excluding the period from the ruling to the s.245T order). Sub-section (3) substitutes “Board for Advance Rulings” from a notified date.
Finance Act, 2026: No amendment to section 245T.
Status: No direct merits ruling reported on s.245T. Candour rule applied. The provision parallels s.245D(7)/(6) of the Settlement scheme; cognate authority on fraud/misrepresentation and on the avoidance enquiry (where a substance-less structure is exposed) is supplied.
A. SECTION COMMENTARY
1. A fraud-unravelling power
Section 245T is the integrity safeguard of the Chapter. A ruling, though otherwise binding under s.245S, is liable to be declared void ab initio if obtained by fraud or misrepresentation of facts. The consequence is drastic: the ruling is treated as never made, and the Act applies to the applicant accordingly, with the intervening period excluded from limitation. The power may be set in motion by a representation from the Commissioner or by the Authority of its own motion; Rule 23 of the AAR (Procedure) Rules requires the representation to be supported by a statement of facts and evidence of the fraud or misrepresentation.
2. Parallel with the Settlement scheme
The provision is the advance-ruling analogue of s.245D(6) (settlement void if obtained by fraud or misrepresentation) in Chapter XIX-A. The settled construction of that cognate power is instructive: the Supreme Court in Om Prakash Mittal held that a settlement obtained by fraud or misrepresentation is rightly declared void, the test being whether material facts were suppressed or false facts presented. The same approach governs s.245T — it is the procurement of the ruling by deception, not mere subsequent disagreement with it, that triggers avoidance.
3. Overlap with the avoidance enquiry
Where a ruling is obtained by presenting a structure as having commercial substance which in truth it lacks, the line between the s.245R(2)(iii) avoidance bar (operating at admission) and the s.245T void-for-misrepresentation power (operating after a ruling) can converge. The substance-over-form reasoning of Groupe Industrial Marcel Dassault and, at the apex level, Tiger Global (2026) — where a Tax Residency Certificate was held not conclusive and the real ownership/control of a paper structure was examined — illustrates the kind of misrepresentation of facts that could ground a s.245T declaration had a ruling been procured on a false factual premise.
4. Candour
No reported decision applies s.245T directly. The fraud principle and the cognate s.245D(6) authority below are the nearest governing law; they are offered as cognate, not as direct construction of s.245T.
B. STATUTORY POSITION (verbatim text)
The text of section 245T, as it stands in the Act (Finance Act, 2025 base text), is set out below.
245T. (1) Where the Authority finds, on a representation made to it by the Principal Commissioner or Commissioner or otherwise, that an advance ruling pronounced under sub-section (6) of section 245R has been obtained by the applicant by fraud or misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the provisions of this Act shall apply (after excluding the period beginning with the date of such advance ruling and ending with the date of order under this sub-section) to the applicant as if such advance ruling had never been made.
(2) A copy of the order made under sub-section (1) shall be sent to the applicant and the Principal Commissioner or Commissioner.
(3) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint, the provisions of this section shall have effect as if for the word "Authority", the words "Board for Advance Rulings" had been substituted.
Editorial note: section 245T parallels the void-for-fraud power in s.245D(6) of Chapter XIX-A; Rule 23 of the AAR (Procedure) Rules, 1996 prescribes the procedure.
C. AUTHORITIES
Candour rule: no direct authority on s.245T. The cognate authorities below state the fraud/misrepresentation principle (general and under the parallel Settlement provision) and the substance enquiry that exposes a false factual premise.
Cluster 1 — Fraud / misrepresentation: general and cognate (s.245D)
S.P. Chengalvaraya Naidu v. Jagannath (1994) 1 SCC 1 (SC)
Held: Fraud vitiates the most solemn proceedings; a judgment or order obtained by fraud is a nullity and may be treated as non-est.
Relevance: The first principle behind s.245T — a ruling procured by fraud is void ab initio.
Om Prakash Mittal v. CIT (2005) 273 ITR 326 (SC) — cognate (s.245D(6))
Held: A settlement obtained by fraud or misrepresentation of facts is rightly declared void; suppression of material facts or presentation of false facts is the touchstone.
Relevance: Construes the parallel void-for-fraud power; the same test governs s.245T.
Cluster 2 — Exposure of a false/substance-less factual premise (cognate)
Authority for Advance Rulings (Income Tax) v. Tiger Global International II Holdings, 2026 INSC 60 (SC, 15 January 2026)
Held: A TRC is not conclusive of substance; the forum may examine the real control, management and ownership of an arrangement (full note under s.245R).
Relevance: Illustrates the kind of misrepresentation of facts (a structure presented as substantive but in truth a conduit) that could found a s.245T declaration if a ruling were procured on it.
Groupe Industrial Marcel Dassault, In re (2012) 340 ITR 353 (AAR)
Held: An interposed entity with no office, employees, business or assets was a substance-less front; a valid form used as a smokescreen to avoid tax was not protected.
Relevance: Cognate on the factual misrepresentation/colourable-device theme underlying s.245T.
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.