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CA Final · Direct Tax Laws & International Taxation · Advance Rulings

Mehta Infra Ltd, a resident company, is considering applying for an advance ruling on the tax liability arising from a proposed transaction. Under the Income-tax Act, 2025, which of the following correctly states the constitution of the Board for Advance Rulings?

The Board for Advance Rulings has two members. Each must be an officer not below the rank of Chief Commissioner, nominated by the Board. The Central Government constitutes the Board, but the Act specifies this composition and rank for the members.

  1. AOne member, who must be a Commissioner of Income-tax
  2. BTwo members, each an officer not below the rank of Chief Commissioner, nominated by the BoardCorrect
  3. CThree members, including one High Court judge
  4. DTwo members, each an officer not below the rank of Commissioner, nominated by the Central Government

Explanation

Section 381(2) provides that the Board for Advance Rulings consists of two members, each an officer not below the rank of Chief Commissioner, as nominated by the Board. The options mentioning a High Court judge, one member, or the rank of Commissioner do not match the text.

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