SECTION 154 – RECTIFICATION OF MISTAKES

899. Mistakes apparent from records – Whether can be treated as such on the basis of subsequent decision of Supreme Court

1. The Board are advised that a mistake arising as a result of a subsequent interpretation of law by the Supreme Court would constitute “a mistake apparent from the records” and rectificato­ry action under section 35/154 of the 1922 Act/the 1961 Act would be in order. It has, therefore, been decided that where an asses­see moves an application under section 154 pointing out that in the light of a later decision of the Supreme Court pronouncing the correct legal position, a mistake has occurred in any of the completed assessments in his case, the application shall be acted upon, provided the same has been filed within time and is otherwise in order. Where any such applications have already been rejected and the assessee files fresh applications within the statutory time limit, the same may also be treated on par with the applications which may either be pending or received after the issue of this circular.

2. The Board desire that any appeals or references pending on the point at issue may please be withdrawn.

Circular : No. 68 [F.No. 245/17/71-A&PAC], dated 17-11-1971.

JUDICIAL ANALYSIS

EXPLAINED IN – In ITO v. Smt. Manini Niranjanbhai [1992] 41 ITD 324 (Ahd.-Trib.) (SMC) it was observed that as per Circular No. 68, dated 17-11-1971, it is now a well established position that the Supreme Court does not declare the law with effect from the date of its order and the law declared by the Supreme Court has effect not only from the date of the decision but from the inception of the statutory provision. It has been mentioned therein that the Board have been advised that the mistake arising as a result of subsequent interpretation of law by the Supreme Court would constitute a mistake apparent from record and rectificatory action under section 154 would be justified.

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