The Authority for Advance Rulings is an important adjudicatory body on tax matters. The Responsibility of the AAR is to provide the facility of ascertaining the income-tax liability of a non-resident as well as that of certain special categories of residents. If an entity or company has any doubt about the tax liability of its business, it can go to the AAR. The AAR here gives a ruling and it will become policy guide to the company as well as to the tax authorities. Hence, the companies can plan their income-tax affairs well in advance and to avoid long drawn and expensive litigation.
