Legal Insights on Vacancies and Defects in Advance Ruling Bodies : Clause 382 of Income Tax Bill, 2025 Vs. Section 245P of Income-tax Act, 1961

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....ously, the Authority for Advance Rulings) from being challenged or invalidated on the basis of vacancies or defects in the constitution of the relevant body. The statutory insulation provided by such clauses is a common legislative device designed to uphold the continuity, stability, and certainty of quasi-judicial tax proceedings. The legal context in which these provisions operate is the regime of advance rulings in income tax law-a mechanism introduced to provide clarity to taxpayers, particularly non-residents, and to foster a predictable tax environment. The transition from the Authority for Advance Rulings (AAR) to the Board for Advance Rulings (BAR) in recent legislative reforms has necessitated corresponding adjustments in statutory....

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....82. No proceeding before, or pronouncement of advance ruling by, the Board for Advance Rulings, shall be questioned or shall be invalid on the ground merely of the existence of any vacancy or defect in the constitution of the Board for Advance Rulings. This clause is succinct and unambiguous. Its operative parts are: * Scope: It covers both proceedings before the Board and the pronouncement of advance rulings. * Grounds for Challenge: The only grounds insulated are "the existence of any vacancy or defect in the constitution" of the Board. * Effect: Such vacancies or defects cannot be used to question or invalidate the proceedings or rulings. 2. Key Elements and Interpretation Both provisions are intended to apply to two aspects: ....

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....tioned or shall be invalid on the ground merely of the existence of any vacancy or defect in the constitution of the Authority. (2) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint, the provisions of this section shall have effect as if for the word "Authority", the words "Board for Advance Rulings" had been substituted. The structure is similar, with the following features: * Sub-section (1): Mirrors the language of Clause 382 but refers to the "Authority" (i.e., the Authority for Advance Rulings). * Sub-section (2): Provides a transitional mechanism whereby, from a notified date, references to "Authority" are to be read as "Board for Advance Rulings". 1. Structural Comparison....

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....guities and Issues in Interpretation While the language of both provisions is clear, certain potential ambiguities may arise: * Extent of Immunity: The phrase "merely of the existence" suggests that if the vacancy or defect is accompanied by other substantive legal infirmities (e.g., bias, lack of jurisdiction, fraud), the immunity may not apply. * Nature of Defect: If the defect is so fundamental that the Board/Authority is not properly constituted as per the statute (e.g., lack of quorum, or appointment of members who are statutorily disqualified), the protection may not extend. * Retrospective Effect: The transitional provision in Section 245P(2) raises questions about the effect on proceedings initiated before the notified date b....