Rectification of Mistakes u/s 154 of Income Tax : Analysis

By | October 10, 2016


[SECTION 154 of Income Tax Act ]

What mistakes can be rectified

Any mistake apparent from the record

Who can rectify mistakes

The following income-tax authorities can rectify mistakes:

(a)          the CBDT

             (b)             Principal Directors-General/Principal Chief Commissioners/Directors-

General/Chief Commissioners

(c)            Principal Directors/Principal Commissioners/Directors/ Commissioners/

Commissioners (Appeals)

(cc)           Additional Director/Additional Commissioner/Additional Commissioner (Appeals)

(cca)              Joint Directors/Joint Commissioners

(d)                  Deputy Directors/Deputy Commissioner/Deputy Commis-sioners (Appeals)

(e)                  Assistant Directors/Assistant Commissioners

(f)                   Income-tax Officers

(g)                  Tax Recovery Officers

(h)                  Inspectors

What orders may be rectified

  • Any order passed by the concerned income-tax authority under the provisions of the Act
  • Any intimation or deemed intimation under section 143(1)
  • Any intimation under section 200A(1)
  • Any intimation u/s 206CB(1)

Procedure for rectifying mistake

  • The concerned income-tax authority can rectify the mistake of its own motion by passing an order in writing
  • The assessee/deductor may apply (there is no prescribed form for the application) to the concerned income-tax authority for rectification of the mistake
  • The Assessing Officer may apply for rectification where the income-tax authority concerned is the Commissioner (Appeals)
  • Where any such amendment has the effect of reducing the assessment or otherwise reducing the liability of the assessee or the deductor, the Assessing Officer shall make any refund which may be due to such assessee or the deductor
  • Where any amendment has the effect of enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee or the deductor, the Assessing Officer shall serve on the assessee or the deductor, as the case may be, a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 156 and the provisions of this Act shall apply accordingly.

Time limit for passing rectification order

Four years from the end of the financial year in which the order sought to be amended was passed or within 6 months from the end of the month in which the application is received by the income-tax authority, whichever is earlier.


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