The return of Income filed with the Income-tax department shall be processed only after adjusting the errors present in the return. On some occasions there may be a mistake in any order passed by the assessing officer, such mistakes shall be rectified under Section 154 of Income-tax act which shall be discussed in this article.
Orders or Intimations rectified under section 154
As per the provisions of Section 154(1) of the Income Tax Act, Income Tax authority as referred under section 116 of the income tax act may amend the following below-mentioned order or intimations with an intention to rectify any mistake apparent from the records, the
- Assessment Order Passed under the provisions of the Income-tax act
- Intimation or deemed intimation under sub-section (1) of section 143;
- Intimation provided under sub-section (1) of section 200A;
- Intimation under sub-section (1) of section 206CB.
Who shall initiate the rectification (Section 154(2))
As per section 154(2), the concerned income-tax authority may make a rectification:
- On its own motion
- In cases where such mistakes have been brought to the notice of the concerned authority by the assessee or the deductor or by the collector.
In case the authority concerned is Commissioner (Appeals), such a mistake can be brought to his notice by the Assessing Officer also.
Rectification of order subject to Appeals or Revision (Section-154(1A))
Where the order is subject to the matter of any appeal or revision, such matter shall be decided only in such appeal or revision and cannot be rectified by the Assessing Officer.
The time limit for making Rectification
Rectification of order under section 154 shall not be passed after the expiry of 4 years from the end of the financial year in which order sought to be rectified was passed. The period of 4 years shall be counted from the date of order sought to be rectified but not from the date of the original order.
In the case where the assessee or the deductor or the collector has made an application for rectification under this section to an income-tax authority referred to in section 154(1), the concerned authority shall
- amend the order; or
- refuse to allow the claim
within the period of 6 months from the end of the month in which the application is received by the authority.
Procedure for making an application of rectification under section 154
Before making such an application for rectification the assessee or the deductor or the collector should keep the following points in mind.
- The taxpayer or assessee or the deductor or the collector should carefully study the order against which he wants to file the application for rectification.
- On various scenarios the taxpayer or assessee or the deductor or the collector may feel that there is some mistake in the order passed by the Income-tax Department but actually the taxpayer’s calculations could be incorrect and the CPC might have corrected these mistakes, e.g., the assessee may have computed incorrect interest in return of income and in the intimation the interest might have been computed correctly.
- Hence, in order to avoid such kind of aforesaid application of rectification, the taxpayer should study the order and should confirm the existence of a mistake in the intimation, if any.
- Only in case of observance of any mistake in the order, the assessee shall proceed for making an application for rectification under section 154.
- Further, the assessee or taxpayer should confirm that the mistake is one which is apparent from the records and it is not a mistake that requires debate, elaboration, investigation, etc. The taxpayer or assessee or deductor or collector can file an online application for rectification of mistake. For the Procedure for making an online application for rectification, the taxpayer or assessee shall refer to the rectification procedure prescribed at https://incometaxindiaefiling.gov.in/
- Online correction statement is to be filed for the purpose of rectification of intimation under Section 200A(1)/206CB; the procedure the same is given at http://contents.tdscpc.gov.in/en/filing-correction-etutorial.html
- An amendment or rectification which results in the enhancement of the assessment or reducing a refund or otherwise increasing the liability of the taxpayer (or deductor or assessee) shall not be made unless the concerned authority has given notice to the taxpayer or the deductor or the assessee of its intention to do so and a reasonable opportunity of being heard shall be given to the taxpayer or the deductor or the assessee.