Section 384 — Procedure on receipt of application. Successor to s.245R of the 1961 Act.
Section 384 is in Chapter XVIII — Appeals Revisions and Alternate Dispute Resolutions, which runs from section 356 to section 389.
Sub-section (1) requires the Board for Advance Rulings, on receiving an application, to send a copy to the Principal Commissioner or Commissioner and call for the relevant records, which are to be returned at the earliest opportunity. Sub-section (2) lets the Board allow or reject the application by order, and sub-section (3) sets out three mandatory rejection grounds — the question is already pending before an income-tax authority, the Appellate Tribunal or any court (except for a resident applicant under section 380(b)(iii)); it involves determination of the fair market value of property; or it relates to a transaction or issue prima facie designed for avoidance of income-tax (except for a resident applicant under section 380(b)(iii) or an applicant under section 380(b)(iv)). Sub-section (4) forbids rejection without an opportunity of being heard and without reasons in the order, and sub-section (5) requires the order to go to the applicant and the Principal Commissioner or Commissioner. Sub-section (6) requires the ruling, where the application is allowed, to be pronounced in writing within six months of receipt of the application, after examining further material; sub-section (7) gives the applicant a hearing before pronouncement if he asks for one, sub-section (8) provides for the signed and certified copy to be sent to the applicant and the Principal Commissioner or Commissioner, and sub-section (9) takes "authorised representative" from section 515(3)(a).
It sets a fixed timetable and a closed list of gateways for advance rulings, so that the Board cannot refuse on grounds of its own choosing and cannot leave an admitted application undecided. The exclusions keep the forum away from valuation disputes, from questions already before another forum, and from arrangements that look like avoidance.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Time to pronounce the advance ruling | 6 months | From the receipt of the application, and only where the application has been allowed under sub-section (2) | 384(6) |
Time your application against the six-month clock, which runs from receipt of the application and not from the date it is allowed. Before applying, check the three rejection grounds: a question already before an income-tax authority, the Tribunal or a court, a question turning on fair market value, or a transaction that appears designed to avoid tax will be refused — subject to the carve-outs for a resident applicant under section 380(b)(iii) and, for the avoidance ground, an applicant under section 380(b)(iv). You cannot be rejected without a hearing and without reasons in the order, and a hearing before the ruling itself is available only if you ask for it.
A company applies to the Board for Advance Rulings on the taxability of a transaction while the same question is already pending before the Appellate Tribunal in its own case. Sub-section (3)(a) requires the application to be rejected — as does one that involves determination of the fair market value of any property, and one relating to a transaction prima facie designed for the avoidance of income-tax — subject only to the carve-outs for a resident applicant falling under section 380(b)(iii) and, on the avoidance ground, an applicant under section 380(b)(iv). Rejection is not summary: sub-section (4) forbids it without an opportunity of being heard and without reasons in the order. If the application is allowed, the ruling must be pronounced in writing within six months of the receipt of the application — the clock runs from receipt, not from the order allowing it — and a hearing before pronouncement comes only if the applicant asks for one.
In the advance ruling proceeding itself: the order of the Board for Advance Rulings allowing or rejecting your application, a copy of which goes to you and to the Principal Commissioner or Commissioner, and then the signed and certified copy of the ruling. Your records are called for from the Principal Commissioner or Commissioner at the outset and are to be returned at the earliest opportunity.
pronounce its advance ruling in writing, on the question specified in the application within six months of the receipt of application
See the full 1961 to 2025 concordance.
All of them are in the Rules 2026 index.