CBDT Amends Income Tax Rules and Introduces New Forms for Advance Ruling [Read Notification]

Central Board of Direct Taxes (CBDT) has notified the Income-tax (Ninth Amendment) Rules, 2023 amending the Rule 44E of the Income Tax Rules related to Application for obtaining an Advance Ruling.

The amendment seeks to prescribe mode and authorised signatory of the application for different entities, i.e company, firm, individual, Hindu Undivided Family (HUF) etc. Further it prescribes mode of furnishing of the application. The major amendments brought by CBDT include:

Amendment to Rule 44E of the Income Tax Rules: Rule 44E of the Income Tax Rules, 1962 was amended to provide for the filing of an application for an advance ruling in electronic form. This will make it easier for taxpayers to apply for an advance ruling and will help to reduce the time taken to process applications.

Introduction of new Forms 34C to 34EA: New Forms 34C to 34EA are introduced to facilitate the filing of an application for an advance ruling, the submission of additional information and documents, and the withdrawal of an application for an advance ruling.

Clarification on the scope of advance rulings: The amendment clarifies that advance rulings can be issued on any question of law or fact which is relevant for the determination of the liability of a taxpayer to income tax.

In exercise of the powers conferred by section 245Q read with section 295 of the Income Tax Act, 1961, the Central Board of Direct Taxes made the following rules further to amend Income-tax Rules, 1962. In the Income-tax Rules, 1962, in rule 44E, for sub-rule (2), the following sub-rule shall be substituted, namely:

(2) The application referred to in sub-rule (1), the verification appended thereto, the annexures to the said application and the statements and documents accompanying the annexures, shall be,

(a) in the case of an individual,

(I) signed or digitally signed,

(i) by the individual himself; or

(ii) where, for any unavoidable reason, it is not possible for the individual to sign the application, by any person duly authorised by him in this behalf:

Provided that in a case referred to in sub-clause (ii), the person signing the application holds a valid power of attorney from the individual to do so, which shall be attached to the application; and

(II) furnished through his registered e-email address;

(b) in the case of a Hindu undivided family,

(I) signed or digitally signed,

(i) by the Karta thereof; or

(ii) where, for any unavoidable reason, it is not possible for the Karta to sign the application, by any other adult member of such family; and

(II) furnished through its registered e-email address;

(c) in the case of a company,

(I) signed or digitally signed,

(i) by the Managing Director thereof; or where for any unavoidable reason such Managing Director is not able to sign and verify the application, or where there is no Managing Director, by any Director thereof; or

(ii) where, for any unavoidable reason, it is not possible for the Managing Director or the Director to sign the application, by any person duly authorised by the company in this behalf:

Provided that in the case referred to in sub-clause (ii), the person signing the application holds a valid power of attorney from the company to do so, which shall be attached to the application; and

(II) furnished through its registered e-mail address.

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