The Central Board of Direct Taxes (CBDT) has taken a significant step towards enhancing the efficiency and effectiveness of the e-advance rulings (eAR) scheme with the introduction of the e-advance rulings (Amendment) Scheme, 2023. This scheme, as notified through CBDT Notification 38/2023 on June 12, 2023, amends the e-advance rulings (Amendment) Scheme, 2022 notified on January 18, 2022, which aims to provide written opinions or authoritative decisions on the tax consequences of a transaction or proposed transaction, as well as assessments related to them.
CBDT Income Tax Notification 38/2023 dated 12/06/2023: Incorporation of ‘Majority Rule’ in e-Advance Rulings Scheme, 2023
Concept of ‘Majority Rule’ in Advance Rulings
One of the notable changes brought about by the amendment is the incorporation of the concept of ‘majority rule’ in cases where there is a difference of opinions among the Board Members in advance rulings. This provision is specifically outlined in the newly inserted paragraph 6(C)(v) of the e-advance rulings Scheme, 2023.
According to this amendment, in situations where Board Members hold differing opinions, the matter will be referred to the Principal Chief Commissioner of Income-tax (International Taxation). The Principal Chief Commissioner will then nominate a member from another Board for Advance Rulings to decide the advance ruling. This ensures that a fair and unbiased decision is made in cases where there is a lack of unanimity among the Board Members.
The CBDT has notified the e-advance rulings (Amendment) Scheme, 2023, to incorporates the concept of ‘majority rule’ to ensure fair and unbiased decisions in cases of differing opinions among the Board Members to provide authoritative decisions on tax issues.