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

Meridian Components Pvt Ltd, an Indian company, wants to apply for an advance ruling. Which statement correctly describes how the Board for Advance Rulings is constituted under the Income-tax Act, 2025?

The Board for Advance Rulings has two members, each an officer not below the rank of Chief Commissioner, as nominated by the Board. The Central Government constitutes one or more such Boards by notification, so the composition is fixed by the statute and does not include judicial members.

  1. AIt consists of three members, each of the rank of Principal Commissioner
  2. BIt consists of two members, each being an officer not below the rank of Chief Commissioner, as nominated by the BoardCorrect
  3. CIt consists of one member, who must be a retired High Court judge
  4. DIt consists of two members, one a judicial member and one a Commissioner of Income-tax (Appeals)

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. The option with three Principal Commissioners states the wrong number and rank. The judicial member and retired judge options are not part of the composition prescribed.

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