Section 387 of the Income-tax Act, 2025 — Powers of the Board for Advance Rulings

In plain language

What Section 387 says in plain English

Section 387 of the Income-tax Act, 2025 gives the Board for Advance Rulings (BAR) the legal muscle it needs to actually run its proceedings. On its own, a Board can only ask questions; Section 387 makes sure those questions carry the force of law. It does this by clothing the Board with the same enforcement powers a regular civil court has under the Code of Civil Procedure, 1908.

The section has two limbs:

• Sub-section (1) — Civil court powers. The Board, for the purpose of exercising its powers, shall have all the powers of a civil court under the CPC, 1908 that are referred to in Section 246 of the 2025 Act (Section 246 is the general "power to summon, examine on oath, compel production of documents" provision — the successor to the old Section 131 of the 1961 Act).
• Sub-section (2) — Deemed court status. The Board is deemed to be a civil court for the purposes of Section 215 of the 2025 Act, but not for the purposes of Chapter XXVIII of the Bharatiya Nagarik Suraksha Sanhita, 2023 (the new criminal procedure code). Every proceeding before the Board 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 (the new penal code).

What these powers actually let the Board do

Because it wears the hat of a civil court, the Board for Advance Rulings can:

• Summon any person — including any officer of a banking company — and enforce their attendance.
• Examine any person on oath.
• Compel the production of books of account and other documents.
• Issue commissions (e.g. to record evidence).
• Regulate its own procedure in all matters arising out of the exercise of its powers.

The "deemed judicial proceeding" language matters for a practical reason: if a person lies on oath before the Board or fabricates evidence, they can be prosecuted for giving false evidence / perjury under the Bharatiya Nyaya Sanhita, 2023, exactly as if they had done so in a court.

Who this applies to

Section 387 does not create a compliance duty for ordinary taxpayers by itself. It matters to anyone who is a party to an advance-ruling application — typically:

• Non-residents wanting certainty on the Indian tax consequences of a proposed transaction.
• Residents undertaking a transaction with a non-resident, on the tax liability of that non-resident.
• Public sector undertakings and certain notified residents on questions of law or fact.
• Applicants seeking a ruling on whether an arrangement is an impermissible avoidance arrangement (GAAR).

If you, your banker, or a third party holds information the Board needs, Section 387 is the provision that lets the Board formally summon it.

How it fits with the rest of Chapter XVIII

Section 387 sits inside the advance-rulings machinery (roughly Sections 381 to 391 of the 2025 Act). Its neighbours are:

• Section 381 — constitutes the Board (two members, each not below the rank of Chief Commissioner).
• Section 383 — how you apply for a ruling.
• Section 384 — procedure once the application is received.
• Section 388 — the Board regulates its own procedure.
• Section 389 — appeal against a ruling to the High Court.

Sections 387 and 388 are the "engine room": 387 gives the coercive powers, 388 gives procedural autonomy.

Practical implications

• Appear and cooperate. A summons from the Board is legally enforceable — ignoring it is not an option and can attract consequences that apply to disobeying a civil court.
• Tell the truth. Because proceedings are "judicial proceedings", false statements on oath can lead to criminal prosecution.
• No fees or rates here. Section 387 is a machinery provision; it carries no tax rate, no monetary limit and no filing fee of its own. The application fee (historically ₹10,000 for the standard resident/PSU category, higher for large transactions) sits under the application rules, not under Section 387.
• Continuity from the 1961 Act. This is essentially a re-enactment of Section 245U of the Income-tax Act, 1961, updated to point at the new criminal codes (BNSS and BNS, 2023) instead of the Code of Criminal Procedure, 1973 and the Indian Penal Code, 1860.