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

Ramesh Textiles Ltd, a resident company, plans to approach the Board for Advance Rulings. Before filing, its finance head checks the constitution of the Board under the Income-tax Act, 2025. Which statement correctly describes the composition of a Board for Advance Rulings?

A Board for Advance Rulings has two members, and each must be an officer not below the rank of Chief Commissioner, as nominated by the Board. The Central Government constitutes one or more such Boards as necessary, so a lower rank or a single judicial member is not the rule.

  1. AIt consists of two members, each an officer not below the rank of Chief Commissioner, nominated by the BoardCorrect
  2. BIt consists of three members, one each from the judiciary, the revenue and the law ministry
  3. CIt consists of two members, each an officer not below the rank of Commissioner
  4. DIt consists of a single member who is a retired High Court judge

Explanation

Section 381(2) provides that the Board consists of two members, each an officer not below the rank of Chief Commissioner, as nominated by the Board. The option with Commissioner rank understates the required seniority, so it is wrong. The other options describe compositions not found in the provision.

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