M/s GreenTech Innovations Pvt. Ltd., a resident Indian company, is planning to enter into a collaboration with a German firm for technology…

CA Final · Direct Tax Laws and International Taxation · MTP · September 2025
M/s GreenTech Innovations Pvt. Ltd., a resident Indian company, is planning to enter into a collaboration with a German firm for technology licensing. To understand the taxability of royalty payments under the India-Germany DTAA, it files an application for Advance Ruling before the Board for Advance Rulings in April 2025. However, it is later revealed that M/s GreenTech Innovations Pvt. Ltd. had already submitted a detailed note on the same transaction to its Assessing Officer in March 2025 as part of a suo moto disclosure during scrutiny proceedings for A.Y. 2024–25. The AO had not yet issued any order but had acknowledged the issue for further verification. In light of Section 245R(2) of the Income-tax Act, 1961, will the application for advance ruling filed by M/s GreenTech Innovations Pvt. Ltd. be allowed?What is the remedy available to an applicant who is aggrieved by the ruling of Board for Advance Rulings?
(A) 1. As per Section 245R, a resident assessee cannot pursue both the remedies, i.e., an appeal or revision before Income-tax Authority/Appellate Authority as well as an application for Advance Ruling to Board for Advance Rulings, in respect of an issue. The Board shall not allow an application where the question raised in the application is already pending before any income-tax authority, or Appellate Tribunal or any court. 2. The applicant who is aggrieved by any ruling pronounced or order passed by the Board for Advance Rulings may appeal to the High Court against such ruling or order of the Board of Advance Rulings within 60 days from the date of communication of that ruling or order.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

1. As per Section 245R, a resident assessee cannot pursue both the remedies, i.e., an appeal or revision before Income-tax Authority/Appellate Authority as well as an application for Advance Ruling to Board for Advance Rulings, in respect of an issue. The Board shall not allow an application where the question raised in the application is already pending before any income-tax authority, or Appellate Tribunal or any court. 2. The applicant who is aggrieved by any ruling pronounced or order passed by the Board for Advance Rulings may appeal to the High Court against such ruling or order of the Board of Advance Rulings within 60 days from the date of communication of that ruling or order.

Topics: Double Taxation Relief, Non-Resident Taxation

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