Section 385 — Appellate authority not to proceed in certain cases. Successor to s.245RR of the 1961 Act.
Section 385 is in Chapter XVIII — Appeals Revisions and Alternate Dispute Resolutions, which runs from section 356 to section 389.
The section is a bar on parallel decision. No income-tax authority and no Appellate Tribunal shall proceed to decide any issue for which an application has been made by an applicant, being a resident, under section 383(1) — that is, an application for an advance ruling stating the question on which the ruling is sought.
An advance ruling is worth having only if the same question is not simultaneously being decided somewhere else. The section holds back the ordinary machinery on that question once a resident applicant has put it before the advance ruling process, so that two authorities do not decide the same issue at once.
The bar is issue-specific, not proceeding-wide. What is stopped is deciding "any issue for which an application has been made" — the rest of an assessment or an appeal is not frozen, and other issues in the same proceeding may go on. It is also confined by who applied: the words are "an applicant, being a resident", so an application by someone who is not a resident does not engage this section. Finally it names its addressees — income-tax authorities and the Appellate Tribunal — and no one else; the High Court and the Supreme Court are not among them.
A resident company applies under section 383(1) for a ruling on whether a particular receipt is taxable, and the same question is live in an appeal before the Appellate Tribunal. The Tribunal cannot decide that issue while the application stands, but nothing prevents it from deciding the other grounds in the same appeal, and nothing prevents the Assessing Officer from continuing with the parts of the assessment that do not turn on that question.
You meet it as the reason an assessment or an appeal is left part-decided: it is cited to an Assessing Officer, a Commissioner (Appeals) or the Appellate Tribunal to hold back one issue while the advance ruling application on it is on foot.
No income-tax authority or the Appellate Tribunal shall proceed to decide any issue for which an application has been made by an applicant, being a resident, under section 383(1).
See the full 1961 to 2025 concordance.