The Central Board of Direct Taxes (CBDT) has recently made a significant amendment to Rule 44E of the Income Tax Rules, 1962, aimed at simplifying the process for applicants seeking advance rulings. Through Notification 37/2023 dated 12 June 2023, the CBDT has eliminated the mandatory digital signing requirement for Advance Ruling applications, bringing relief to taxpayers and reducing the burden on the Authority for Advance Rulings (AAR).
CBDT Income Tax Notification 37/2023 dated 12/06/2023: Elimination of Mandatory Digital Signing Requirement to simplify Process for Advance Ruling Applications
CBDT Income Tax Notification 53/2023 dated 26/07/2023: Corrigendum to Notification 37/2023 dated 12/06/2023
Elimination of Mandatory Digital Signing Requirement
Under the amended rule, applicants seeking advance rulings can now choose between submitting signed or digitally signed applications to the Secretary of the Board for Advance Rulings (BAR) via electronic mail. This change provides flexibility to applicants and streamlines the application process. Previously, individuals who were required to digitally sign their income tax returns were also obligated to furnish their advance ruling applications under digital signature. However, with this amendment, the mandatory digital signing requirement has been eliminated.
Introduction of Amended Forms: 34C to 34EA
To align with the revised rule, the CBDT has introduced amended forms to facilitate the application process. The revised forms 34C, 34D, 34DA, 34E and 34EA reflect the changes brought about by the elimination of the mandatory digital signing requirement. Applicants can now choose to sign these forms manually or digitally, depending on their preference and convenience.
Simplifying the AR Application Procedure
The amendment to Rule 44E of the Income Tax Rules, 1962, is a step towards simplifying the procedure for obtaining advance rulings. By eliminating the mandatory digital signing requirement, the CBDT aims to make the process simpler, less expensive and more expeditious. This change will benefit taxpayers seeking advance rulings, allowing them to choose the signing method that suits them best, whether it’s a physical signature or a digital one. The introduction of amended forms further supports the streamlining of the application process.
Background and Legal Basis
The recent amendment is part of the Income-tax (Twelfth Amendment) Rules, 2022, issued by the CBDT on May 5, 2022. The CBDT made this revision to align the rule and forms with the amendment to the Income Tax Act, 1961. By doing so, CBDT has ensured consistency and harmony in the application process for advance rulings. The amendment reflects the CBDT’s commitment to enhancing taxpayer convenience and reducing unnecessary burdens.
Conclusion
The CBDT’s amendment to Rule 44E of the Income Tax Rules, 1962, eliminates the mandatory digital signing requirement for Advance Ruling applications. This simplifies the process for applicants seeking advance rulings and allows them to submit signed or digitally signed applications via electronic mail. The introduction of amended forms further supports this change. Overall, these revisions contribute to a more streamlined, cost-effective and efficient procedure for obtaining advance rulings, benefiting taxpayers and reducing the workload on the Authority for Advance Rulings.
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