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2012 (8) TMI 739 - DELHI HIGH COURTRejection of application by AAR on barred u/s 245R (2) (1) - Objective of the mechanism of advance rulings - unless the assessing authority specifically raised a question, and issued notice calling the assessee to respond to it, the question would not arise, and consequently, the bar would not apply - the filing of a return of income did not automatically result in a question being "pending" before the Income Tax Authority - Held that:- The proviso to Section 245R(2) creates a bar to the jurisdiction of the Authority if it is seen that any of the conditions are fulfilled as once the assessee proceeds to file a return, or take a similar step, the Authority's jurisdiction to entertain the application for advance ruling is taken away, because the Income Tax authority concerned would then be seized of the matter, and would potentially possess a multitude of statutory powers to examine and rule on the return. Conversely, if the authority is approached before an income tax return is filed, or any other income tax authority is approached, the application can be entertained, and the AAR would be exclusively dealing with the matter before it - thus AAR held that in the case of the applicants, keeping the dates of filing of return in mind, its jurisdiction to entertain the application was barred under Section 245R(2) Proviso (1) - that upon a return of income being filed, the matter is "pending", in the sense that the Assessing Officer has the right to take such steps, including issuance of notice, etc, the further duty cast on the assessee to disclose all facts, including every potential income. The argument that the AAR erred in not following a so called past practice is unpersuasive as no practice, without its roots in the law, but based on an unchallenged understanding can be pursued, holding otherwise would be creating an estoppel against a statute - thus AAR was correct in rejecting the application for ruling.
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