CA Final · Direct Tax Laws & International Taxation · Advance Rulings
Meridian Components Ltd, a resident company, wants an advance ruling on the tax liability from a proposed transaction. It plans to apply under the Income-tax Rules, 2026 and asks which Board for Advance Rulings composition is correct under the Income-tax Act, 2025. Which statement is correct?
The Board for Advance Rulings has two members, each an officer not below the rank of Chief Commissioner, as nominated by the Board. The Act does not provide for judges or a single Commissioner-rank member, so the other compositions are incorrect.
- AThe Board consists of two members, each an officer not below the rank of Chief Commissioner, nominated by the BoardCorrect
- BThe Board consists of three members, including one High Court judge
- CThe Board consists of a single member of the rank of Commissioner
- DThe Board consists of two members, each not below the rank of Principal Commissioner of Income-tax
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, nominated by the Board. Option D understates the rank. The other options invent a different composition.
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