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Non-resident-
the manner of deciding the status
While
considering the maintainability of an application, the
basic question to be decided is whether, the applicant
is a non-resident. AAR has ruled that the question of
residence must be determined with reference to the previous
year and not with reference to a particular date. Thus,
if a non-resident takes up employment in India, the
period from the date of taking of employment to the
end of the financial year would be regarded as previous
year. If the applicant is non-resident in that period,
the application would be maintainable.
AAR
has ruled that while calculating the number of days
when the applicant was in India, the days on which he
entered India and the days on which he left India should
be included.
Pronouncement
of Advance Ruling
The
Authority shall, after examining the application and
such further material as may be placed before it by
the applicant or obtained by the Authority, by order,
either allow or reject the application. The Authority
shall not allow the application where the question raised
in the application:
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is
already pending before an income tax authority or
Appellate Tribunal, except in the case of a resident
applicant falling under section 245N(b)(iii) or
any court;
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involves
determination of fair market value of any property;
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relates
to a transaction or issue which is designed prima
facie for the avoidance of income tax [except in
the case of a resident applicant falling under section
245N(b)(iii)].
No
application shall be rejected by the Authority, unless
an opportunity has been given to the applicant of being
heard. Where the application is rejected, reasons for
such rejection shall be given in the order by the Authority.
Where
an application is allowed, the Authority shall pronounce
its advance ruling on the question specified in the
application.
On
a request received from the applicant, the Authority
shall before pronouncing its advance ruling provide
an opportunity to the applicant of being heard, either
in person or through a duly authorised representative.
Time
Limit for pronouncement of Advance ruling
The
Authority shall announce its advance ruling in writing
within six months of the receipt of application.
Order
of Advance Ruling to be sent :
A
copy of the advance ruling announced by the Authority,
duly signed by the members and certified in prescribed
manner, shall be sent to the applicant and to the Commissioner,
as soon as may be, after such pronouncement.
Appellate
authority not to proceed in certain cases :
No
income tax authority or the Appellate Tribunal shall
proceed to decide any issue in respect to which an application
has been made by a resident applicant.
Applicability
of Advance Ruling
The
Advance Ruling shall be binding only on the applicant
who had sought it and in respect of the transaction
in relation to which advance ruling was sought.
It
shall also be binding on the Commissioner and income
tax authorities subordinate to him in respect of the
applicant and the said transaction.
The
Advance Ruling will continue to be binding as aforesaid
unless there is a change either in law or facts on the
basis of which the advance ruling was pronounced.
Advance
rulings on two important topics
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Whether
the applicant could be considered as a technician
for purposes of Section 10(5B) of the Income Tax
Act, 1961, thereby eligible for exemption from grossing
up of the income earned as a technician. Refer Annexure
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Whether
the applicant could be considered not to have a
Permanent Establishment in India, thereby eligible
for exemption from Income Tax Act, 1961 with respect
to profits earned in India. Refer Annexure
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