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The
Authority for Advance Rulings for Income Tax was set-up with
effect from 1st June, 1993 under the provisions of the
Finance Act, 1993 with a view to avoid disputes regarding
assessments of income-tax liability in respect of
non-residents. The Scheme enables the non-residents to
obtain, in advance, binding rulings from the Authority on
issues which could arise in the determination of their tax
liabilities.
The AAR consists of a Chairman (retired Judge of the Supreme
Court with a fixed salary of Rs.30,000/-) with two Members
of the rank of Additional Secretary to the Government of
India and other gazetted and non-gazetted staff. The AAR has
a total of 38 posts on its strength which are continued on
year to year basis. Although
the Authority was initially created to pronounce rulings in
respect of non-residents only, its scope was enlarged by way
of amendment in the Income Tax Act. The Gazette notification
issued on 21.6.1999 specifies the following class of
resident taxpayers as applicants for the purpose of Chapter
XIX-B of the Income Tax Act :-
(a)
public sector company as defined in clause 36(A) of the
Income Tax Act.
(b)
person seeking advance ruling in relation to the tax
liability of a non-resident arising out of a transaction
undertaken or proposed to be undertaken by him with a
non-resident.
The
Authority for Advance Rulings for Income Tax comprises of
the following officers:-
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