The Transformation of Advance Rulings Powers under Indian Tax Law : Clause 387 of the Income Tax Bill, 2025 Vs. Section 245U of the Income-tax Act, 1961

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....originally found in Chapter XIX-B of the Income-tax Act, 1961, with Section 245U delineating the powers of the Authority for Advance Rulings (AAR). In recent years, a paradigm shift has occurred with the creation of the Board for Advance Rulings (BAR), reflecting both structural and functional changes in the regime. Clause 387 of the Income Tax Bill, 2025, proposes to formally codify the powers of the Board for Advance Rulings. This commentary undertakes a detailed analysis of Clause 387, interprets its provisions, and compares them with the extant Section 245U of the Income-tax Act, 1961, highlighting the evolution, similarities, and departures in the legislative approach to the powers and status of the Advance Ruling body. Objective and....

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....vits * Any other powers as may be necessary for the effective adjudication of advance ruling applications This is a direct adoption of the powers typically granted to civil courts, ensuring that the BAR is not a mere administrative body but is vested with the authority to conduct proceedings with judicial rigor. 2. Status as a Civil Court Clause 387(2) stipulates that the Board for Advance Rulings shall be considered a civil court for the purposes of section 215 of the Bill, but not for the purposes of Chapter XXVIII of the Bharatiya Nagarik Suraksha Sanhita, 2023. This nuanced provision has several implications: * For specific purposes (e.g., certain evidentiary or procedural matters), the BAR is deemed to be a civil court, thereby ....

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....ignificant distinction is the updating of references in Clause 387 to the Bharatiya Nagarik Suraksha Sanhita, 2023, and the Bharatiya Nyaya Sanhita, 2023, in place of the older Code of Criminal Procedure, 1973, and Indian Penal Code, 1860, as seen in Section 245U. This reflects a legislative intent to harmonize the tax law framework with the new criminal law regime, ensuring continuity and relevance. For example: * Section 195 CrPC (old) is replaced by section 215 of the new Bill. * Sections 193, 228, and 196 IPC (old) are replaced by sections 229, 267, and 233 of the Bharatiya Nyaya Sanhita, 2023. 2. Powers of Civil Court: Section Reference Section 245U(1) refers to the powers u/s 131 of the Income-tax Act, 1961, whereas Clause 387(....

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....ope of the BAR's powers under the referenced sections-especially if the corresponding sections in the new Bill or Codes diverge from their predecessors. * The impact of excluding certain chapters of the criminal procedure codes-whether this limits the ability to prosecute certain offences or affects the enforceability of the BAR's orders. * The practical effect of treating proceedings as judicial for some purposes but not others, potentially leading to interpretive disputes. Comparative Features Table Feature Section 245U of the Income-tax Act, 1961 Clause 387 of the Income Tax Bill, 2025 Powers of Civil Court As per Section 131, Code of Civil Procedure, 1908 As per Section 246 of the new Bill, Code of Civil Procedu....