Sections 385 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 385 to 389 of the Income-tax Act, 2025 complete the advance-ruling scheme: they stop other authorities from deciding an issue once a resident has applied, allow a ruling obtained by fraud to be declared void, give the Board for Advance Rulings the powers of a civil court, let it regulate its own procedure, and provide an appeal to the High Court. This article reads them as per the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026.
Once a resident applicant applies for an advance ruling, no income-tax authority or the Appellate Tribunal shall decide that issue (section 385). A ruling obtained by fraud or misrepresentation can be declared void ab initio (section 386). The Board for Advance Rulings has the powers of a civil court as referred to in section 246 (section 387) and regulates its own procedure (section 388). The applicant can appeal to the High Court within sixty days of communication of the ruling or order, with a further thirty days allowed for sufficient cause (section 389).
Where these sections sit
These are the second half of part D.2, "Advance rulings", of Chapter XVIII. The definitions, the Board, the application and the procedure up to pronouncement are in sections 380 to 384. The Chapter is summarised in the Chapter XVIII guide. Later amendments, rules and notifications should be checked.
If you are weighing an advance ruling against other routes, see our page on legal consultation.
Section 385: no parallel decision for a resident applicant
No income-tax authority or the Appellate Tribunal shall proceed to decide any issue for which an application has been made by an applicant, being a resident, under section 383(1).
Three points follow from the words:
- It applies only where the applicant is a resident. Nothing in the section stops a decision on the issue where the applicant is a non-resident.
- The bar covers income-tax authorities and the Appellate Tribunal. Courts are not named.
- The bar attaches to "the issue for which an application has been made", so other issues in the same case are not covered. The text does not say when the bar ends; read it with the withdrawal right in section 383(3) and the pronouncement of the ruling.
Section 386: ruling void in certain circumstances
Sub-section (1). Where, on a representation made by the Principal Commissioner or Commissioner or otherwise, the Board for Advance Rulings finds that an advance ruling pronounced under section 384(6) was obtained by the applicant by fraud or misrepresentation, it may by order declare the ruling to be void ab initio. Thereupon all the provisions of the Act apply to the applicant as if the ruling had never been made, after excluding the period beginning with the date of the ruling and ending with the date of the order under this sub-section.
Sub-section (2). A copy of the order goes to the applicant and the Principal Commissioner or Commissioner.
The exclusion of the period means that time limits under the Act are not counted for the period between the ruling and the order declaring it void. The text consulted does not name which limits.
Section 387: powers of the Board for Advance Rulings
- (1) For the purpose of exercising its powers, the Board for Advance Rulings has all the powers of a civil court under the Code of Civil Procedure, 1908 (5 of 1908) as are referred to in section 246 of this Act.
- (2) The Board for Advance Rulings is deemed to be a civil court for the purposes of section 215, but not for the purposes of Chapter XXVIII of the Bharatiya Nagarik Suraksha Sanhita, 2023 (46 of 2023). Every proceeding before it is deemed to be a judicial proceeding under sections 229 and 267 and for the purposes of section 233 of the Bharatiya Nyaya Sanhita, 2023 (45 of 2023).
The other laws are quoted as printed; check them where it matters. For the powers referred to in section 246, see our post on summons powers.
Section 388: procedure of the Board
The Board for Advance Rulings shall, subject to the provisions of the Chapter, have power to regulate its own procedure in all matters arising out of the exercise of its powers under the Act. The section prints no particular procedure.
Section 389: appeal
| Sub-section | Rule |
|---|---|
| (1) | The applicant, if aggrieved by any ruling pronounced or order passed by the Board for Advance Rulings, or the Assessing Officer on the directions of the Principal Commissioner or Commissioner, may appeal to the High Court against such ruling or order of the Board for Advance Rulings within sixty days from the date of communication of that ruling or order, in such form and manner as may be prescribed |
| (2) | Where the High Court is satisfied, on an application by the appellant, that the appellant was prevented by sufficient cause from presenting the appeal within that period, it may grant a further period of thirty days |
Note the wording: the appeal lies at the instance of the applicant. The section does not mention an appeal by the department. The form and manner are left to the Income-tax Rules, 2026. "High Court" has the meaning given in section 374 (see our post on sections 369 to 374).
Worked example
Orchid Holdings Private Limited (an invented resident company) applies for an advance ruling under section 383(1) on a question relating to its own tax liability. From the date of the application, no income-tax authority or the Appellate Tribunal shall proceed to decide that issue (section 385). The Board pronounces its ruling. Suppose that later, on a representation by the Principal Commissioner, the Board finds that the company obtained the ruling by misrepresenting a material fact. It may declare the ruling void ab initio by an order (section 386), after which the Act applies to the company as if the ruling had never been made, excluding the period from the date of the ruling to the date of the order.
Separately, imagine the Board's ruling goes against the company. The ruling is communicated to the company on 20 February. It can appeal to the High Court within sixty days from that date (section 389(1)): the sixty days run to 21 April if counted from the day after (8 days left in February in a non-leap year after the 20th, 31 days in March, and 21 days in April). If it misses the date and shows sufficient cause, the High Court may grant a further thirty days (section 389(2)).
Need help with an advance ruling or appeal?
If a ruling has been pronounced and you are considering an appeal, or you want to see how a pending application affects other proceedings, our team can help. Please contact us through the page for legal consultation.
Key takeaways
- A resident applicant's application stops income-tax authorities and the Appellate Tribunal from deciding that issue.
- A ruling obtained by fraud or misrepresentation can be declared void from the start.
- The Board has civil-court powers as referred to in section 246 and controls its own procedure.
- The applicant may appeal to the High Court within sixty days, extendable by thirty days for sufficient cause.
Read next
- Sections 380 to 384: advance rulings, the Board, application and procedure
- Section 379: Dispute Resolution Committee
- Sections 365 to 368: appeals to the High Court and the Supreme Court
- Chapter XVIII guide
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.