Rectification of mistakes under section 154 of the Income Tax Act

The Income Tax Act has set procedure for Rectification of mistakes under section 154 of the Act for disposal of errors in the income tax return filed by an assessee.

On a rectification application filed by an assessee rectification is done under section 154, when there is a mistake apparent on record and the assessee wants to get it rectified after filing of his return.

The Delhi high Court in several cases appearing before it has given direction to the Income Tax department to maintain “Rectification Register” where details such as receipt of applications under section 154 of the Income Tax Act, their processing and disposal are to be noted.

Maintenance of “online Register of Rectifications ″:

To facilitate the disposal of applications filed under section 154 in an expedient and transparent way, the Assessing Officers should record the rectification applications in an “online Rectification Register”.

Rectification applications should be uploaded in “Online Rectification Register” by the Assessing Officer when such applications are received by him. The acknowledgement number given to the assessee during the time of receiving application has to be entered in “Online Rectification Register” in the column provided for that purpose.

The applications filed under section 154 should be received, recorded and acknowledgment number has to be given to the tax payer by the receiving Assessing Officer having jurisdiction at the time of filing the same.

Disposal of rectification applications:

According to the provisions of Section 154 of the Income Tax Act, 196l, every application has to be disposed of by means of appropriate order within six months of receiving of the application but the service delivery standard for deciding rectification application has been framed as two months. The concerned authorities have to abide by this standard and have to decide the applications within two months from the end of the month in which the application was received.

The decision under section 154 of Income Tax Act has to fulfill all the legal essentials and has to be should be an order which will be invariably communicated to the assessee immediately after the disposal.

In case of e-filed returns, the rectification applications should be filed online. Immediately action has to be taken by CPC or it the same should be transferred to the Assessing Officer for proper action. Action should be taken within the time-framed.  Whereas, if the Assessing Officer while disposing the application requires entering it in the online rectification register, process and make necessary entries after it is disposed off. The prescribed time limit has to be followed strictly.

The above procedure should always be strictly followed with immediate effect and the proper maintenance of online rectification register should be supervised by the concerned supervisory officers.