Rule 227 — Prescribed authority for tax clearance certificates under section 420. Made under s.420 of the Income-tax Act, 2025.
Rule 227 gives effect to Section 420 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
Sub-rule (1) names the prescribed authority for section 420(1): the Chief Commissioner of Income-tax or the Director-General of Income-tax, as the case may be, who has jurisdiction over persons not domiciled in India, or any other income-tax authority authorised by that Chief Commissioner or Director-General in this behalf.
Sub-rule (2) names the prescribed authority for section 420(3): the Chief Commissioner of Income-tax having jurisdiction over persons domiciled in India, or any other income-tax authority authorised by him in this behalf.
Sub-rule (3) provides that for the purposes of section 420(5), an application for the certificate is to be filed to the Assessing Officer who has jurisdiction to assess the person.
Section 420 works through a prescribed authority for tax clearance certificates but does not identify it. The rule does, and it draws the line by domicile: one authority for persons not domiciled in India under section 420(1) and another for persons domiciled in India under section 420(3), with a delegation power in each case. Sub-rule (3) separately routes the application under section 420(5) to the officer who actually assesses the person.
Three different officers appear in one short rule and they are not interchangeable. Domicile, not residence or citizenship, decides which of sub-rules (1) and (2) applies, and the Director-General of Income-tax appears only in sub-rule (1), for persons not domiciled in India. Both sub-rules allow the function to be discharged by another income-tax authority authorised in that behalf, so a certificate signed by such an authority is not defective for that reason. The application under section 420(5), however, does not go to any of these: sub-rule (3) sends it to the Assessing Officer who has jurisdiction to assess the person.
An individual domiciled in India needs a certificate under section 420(3). The prescribed authority is the Chief Commissioner of Income-tax having jurisdiction over persons domiciled in India, or an income-tax authority he has authorised. A person not domiciled in India needing a certificate under section 420(1) goes instead to the Chief Commissioner or Director-General having jurisdiction over persons not domiciled in India. Either of them applying under section 420(5) files the application with the Assessing Officer who has jurisdiction to assess him.
A reader meets it when a tax clearance certificate is required before leaving India — in identifying the officer to approach, and in the application filed with the Assessing Officer under section 420(5).
the prescribed authority shall be the Chief Commissioner of Income-tax having jurisdiction over the persons domiciled in India or any other income-tax authority authorised by him in this behalf
an application for certificate shall be filed to the Assessing Officer who has jurisdiction to assess such person