Binding effect of advance rulings upheld where assessment followed the ruling and no change in law or facts was shown.

An advance ruling is binding on the applicant and the tax authorities for the transaction for which it is obtained, unless there is a change in law or facts. Where the assessment order and first appellate order merely follow that ruling, no infirmity arises in their application of it. The pendency of a writ petition against the advance ruling does not by itself remove its binding effect for the authorities below, absent any reversal by the High Court. On that basis, the appeal was held not sustainable and the first appellate order was upheld.

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Issues: Whether the assessment orders and the appellate order were liable to be interfered with when they merely followed the advance ruling pronounced in the assessee's own case, and whether the assessee's appeal could survive in view of the binding effect of that ruling.

Analysis: The advance ruling pronounced under the Act was binding on the applicant and on the income-tax authorities in relation to the transaction for which it was sought, unless there was a change in law or facts. The assessment order was passed only by applying that ruling, and no infirmity was shown in the authorities' action in following it. The filing of a writ petition against the advance ruling did not displace its binding effect for the authorities below, and no reversal by the High Court was shown.

Conclusion: The appeal was not sustainable and the order of the first appellate authority was upheld.

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