Summary :- Rectification of mistakes under Section 154 of the Income-tax Act allows correction of errors that are apparent from the record in orders issued by income-tax authorities. Sch mistakes may appear in assessment orders passed under any provision of the Act, intimations under Section 143(1), and statements processed under Sections 200A(1) and 206CB. These provisions enable correction of arithmetical errors or inaccuracies arising from information already on record. However, if rectification results in an increased tax liability or reduction in refund, the taxpayer must be given a reasonable opportunity to be heard. When an order has been considered in appeal or revision, the Assessing Officer cannot modify any matter already decided in such proceedings; only issues not adjudicated by the appellate authority can be rectified. Rectification may be initiated either by the income-tax authority on its own motion or by the taxpayer through a formal request. For orders issued by the Commissioner (Appeals) or Joint Commissioner (Appeals), rectification is permitted upon noticing a mistake pointed out either by the Assessing Officer or by the taxpayer.
Section 154 prescribes a strict time limit for rectification. No rectification order can be passed after four years from the end of the financial year in which the order sought to be amended was issued. This four-year period is computed from the date of the order being rectified, not the original order, meaning that if an order has been revised or set aside and reissued, the limitation period will run from the date of the fresh order. When a taxpayer applies for rectification, the authority must either amend the order or reject the request within six months from the end of the month in which the application was received. Before filing an application, the taxpayer must carefully review the order to ensure that an actual error exists and that it is evident from the records without requiring debate or interpretation. Many rectification requests arise from the taxpayer’s misunderstanding of the computations made by CPC, such as interest recalculations that may already be correct. Taxpayers can apply for rectification online by following the procedure available on the income-tax portal, while corrections related to TDS/TCS processing under Sections 200A/206CB must be made through online correction statements.
A rectification that increases assessment, reduces refund, or otherwise enhances liability cannot be made without giving prior notice and providing an opportunity of being heard to the taxpayer or deductor. The concept is also tested through multiple-choice questions, emphasizing key principles such as the scope of rectifiable orders, rectification in appeal situations, time limits, and procedural requirements. The MCQs reaffirm that only mistakes apparent from the record qualify for correction, rectification may be initiated by authorities or taxpayers, the four-year limitation period applies, online applications are permitted, and principles of natural justice must be followed before issuing any rectification order that adversely affects the taxpayer. Through these rules, Section 154 establishes a structured mechanism for correcting clear and obvious mistakes while maintaining procedural safeguards for taxpayers.
RECTIFICATION OF MISTAKE UNDER SECTION 154
Introduction
Sometimes there may be a mistake in any order passed by the Assessing Officer. In such a situation, mistake which is apparent from the record can be rectified under section 154. The provisions relating to rectification of mistake under section 154 are discussed in this part.
Order which can be rectified under section 154
With a view to rectifying any mistake apparent from the record, an income-tax authority may, –
a) Amend any order passed under any provisions of the Income-tax Act.
b) Amend any intimation or deemed intimation sent under section 143(1).
c) Amend any intimation sent under section 200A(1) [section 200A deals with processing of statements of tax deducted at source i.e. TDS return].
d) amend any intimation under section 206CB.
(*) Under section 200A, a TDS statement is processed after making correction of any arithmetical error in the statement or after correcting an incorrect claim, apparent from any information in the statement
Similarly a new section 206CB is inserted by Finance Act, 2015 to provide for the processing of TCS statement.
If due to rectification of mistake, the tax liability of the taxpayer is enhanced or refund is reduced, the taxpayer shall be given an opportunity of being heard.
Rectification of order which is subject to appeal or revision
If an order is the subject-matter of any appeal or revision, any matter which is decided in such an appeal or revision cannot be rectified by the Assessing Officer. In other words, if an order is subject matter of any appeal, then the Assessing Officer can rectify only those matters which are not decided in such appeal.
Initiation of rectification by whom
The income-tax authority can rectify the mistake on its own motion.
The taxpayer can intimate the mistake to the income-tax authority by making an application to rectify the mistake.
If the order is passed by the Commissioner (Appeals) or the Joint Commissioner (Appeals), then such the Commissioner (Appeals) or the Joint Commissioner (Appeals) can rectify mistake which has been brought to notice by the Assessing Officer or by the taxpayer.
Time-limit for rectification
No order of rectification can 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 is from the date of order sought to be rectified and not 4 years from original order. Hence, if an order is revised, set aside, etc., then the period of 4 years will be counted from the date of such fresh order and not from the date of original order.
In case an application for rectification is made by the taxpayer, the authority shall amend the order or refuse to allow the claim within 6 months from the end of the month in which the application is received by the authority.
The procedure to be followed for making an application of rectification
Before making any rectification application the taxpayer should keep following points in mind.
- The taxpayer should carefully study the order against which he wants to file the application for rectification.
- Many times the taxpayer may feel that there is any 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 taxpayer may have computed incorrect interest in return of income and in the intimation the interest might have been computed correctly.
- Hence, to avoid application of rectification in above discussed cases the taxpayer should study the order and should confirm the existence of mistake in the intimation, if any.
- If he observes any mistake in the order then only he should proceed for making an application for rectification under section 154.
- Further, he should confirm that the mistake is one which is apparent from the records and it is not a mistake which requires debate, elaboration, investigation, etc. The taxpayer can file an online application for rectification of mistake. Before making an online application for rectification the taxpayer should refer to the rectification procedure prescribed at https://incometaxindiaefiling.gov.in/
- For rectification of intimation under Section 200A(1)/206CB online correction statement is to be filed; the procedure thereof is given at http://contents.tdscpc.gov.in/en/filing-correction-etutorial.html
- An amendment or rectification which has the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the taxpayer (or deductor) shall not be made unless the authority concerned has given notice to the taxpayer or the deductor of its intention to do so and allowed the taxpayer (or the deductor) a reasonable opportunity of being heard.
MCQ ONRECTIFICATION OF MISTAKE UNDER SECTION 154
Q1. Any mistake which is apparent from the record in any order passed by the Assessing Officer can be rectified under section .
(a) 143 (b) 147
(c) 154 (d) 156
Correct answer : (c)
Justification of correct answer :
Any mistake which is apparent from the record in an order passed by the Assessing Officer can be rectified under section 154.
(a) Thus, option (c) is the correct option.
Q2. Any mistake apparent from the record in any intimation passed under section 200A(1) can be rectified by the Income Tax Authorities under section 154.
(a) True (b) False
Correct answer : (a)
Justification of correct answer :
As per section 154, any mistake apparent from the record can be rectified by the Income Tax Authorities in following cases:
a) Any order passed under any provisions of the Income-tax Act.
b) Any intimation or deemed intimation sent under section 143(1).
c) Any intimation passed under section 200A(1) [section 200A deals with processing of statements of tax deducted at source e. TDS return].
d) amend any intimation under section 206CB.
Thus, the statement given in the question is true and hence, option (a) is the correct option.
Q3. If an order is the subject-matter of any appeal or revision, then any matter which is decided in such an appeal or revision cannot be rectified.
(a) True (b)False
Correct answer : (a)
Justification of correct answer :
If an order is the subject-matter of any appeal or revision, then any matter which is decided in such an appeal or revision cannot be rectified. In other words, if an order is subject matter of any appeal, then the Assessing Officer can rectify the matter which is not decided in by the appellate authority.Thus, the statement given in the question is true and hence, option (a) is the correct option.
Q4. The income-tax authority cannot rectify the mistake on his own.
(a) True (b) False
Correct answer : (b)
Justification of correct answer :
The income-tax authority can rectify the mistake on his own. The taxpayer can also intimate the mistake to the income-tax authority by making an application to rectify the mistake. If the order is passed by the Commissioner (Appeals) or the Joint Commissioner (Appeals), then such the Commissioner (Appeals) or the Joint Commissioner (Appeals) can rectify mistake which has been brought to notice by the Assessing Officer or by the taxpayer.
Thus, the statement given in the question is false and hence, option (b) is the correct option.
Q5. No order of rectification can be passed after the expiry of__ from the end of the financial year in which order sought to be rectified was passed.
(a) 2 (b) 3
(c) 4 (d) 5
Correct answer : (c)
Justification of correct answer :
No order of rectification can 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 is from the date of order sought to be rectified and not 4 years from the date of original order. Hence, if an order is revised, set aside, etc., then the period of 4 years will be counted from the date of such fresh order and not from the original order.
Thus, option (c) is the correct option.
Q6. In case of an application made by the taxpayer, the authority shall amend the order/refuse the amendment within from the end of the month in which the application is received by the authority.
(a) 4 years (b) 2 years
(c) 1 year (d) 6 months
Correct answer : (d)
Justification of correct answer :
In case of an application made by the taxpayer, the authority shall amend the order/refuse to do so within 6 months from the end of the month in which the application is received by the authority.
Thus, option (d) is the correct option.
Q7. The taxpayer cannot file an online application for rectification of mistake under section 154.
(a) True (b) False
Correct answer : (b)
Justification of correct answer :
The taxpayer can file an online application for rectification of mistake. Before making an online application for rectification the taxpayer should refer to the rectification procedure prescribed at Error! Hyperlink reference not valid.hus, the statement given in the question is false and hence, option (b) is the correct option.
Q8. An amendment or rectification which has the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the taxpayer (or deductor) shall be made after giving the taxpayer (or the deductor) a reasonable opportunity of being heard.
(a) True (b) False
Correct answer : (a)
Justification of correct answer :
An amendment or rectification which has the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the taxpayer (or deductor) shall not be made unless the authority concerned has given notice to the taxpayer or the deductor of its intention to do so and allowed the taxpayer (or the deductor) a reasonable opportunity of being heard.
Thus, the statement given in the question is true and hence, option (a) is the correct option.
ONE EDUCATIONAL INSTITUTION HAVING INCOME O10(23CF AROUND 3 CRORES HAD EXEMPTION U/S 10(23C)(VI) AS THE INCOME WAS ABOVE 1 CRERE. FROM AY 2022-23 THE LIMIT OF EXEMPTION U/S 10(23C)(IIIad) WAS INCREASED TO 5 CRORES. UNFORTUNATELY WHILE FILING THE RETURN FOR AY 2022-23 WE FORGOT TO HAVE REMOVED EXEMPTION U/S 10(23C)(VI) AND THE ASSESSMENT WAS COMPLETED TAXING THE ENTIRE REVENUE AS WE HAD NOT FILED FORM 10BB AUDIT REPORT.
WE WANT TO CLAIM EXEMPTION U/S 10(23C)(iiiad) AS OUR INCOME WAS 3 CRORES. IN SPITE OF RECTIFICATION PETITION I WAS NOT ABLE TO CHANGE THE ORIGINAL RETURN AND HENCE HUGE DEMAND IS STANDING.
REQUEST TO GUIDE TO DELETE THE DEMAND
Dept has made demand of Rs.13.86 lakh u/s 143(1). As tax is paid after filing ITR and before 143(1) Order, I need to file rectification u/s 154 along with proof of tax payment OR I need to file revised ITR
My client, a co-operative society, have filed ROM petition against the denial of deduction u/s 80P as against Supreme Court decision, years back which is yet to be disposed. What could be the future course of action that may be adopted by the department against the demand of tax. What shall the action taken by the assessee?
I had filed return before due date but not showing capital loss during filing return. Can I file rectification and carry forward that loss to next year
I had filed return before due date but not showing capital loss during filing return. Can I file rectification and carry forward that loss
विषय : आयकर में सही आयकर दाता एवंम आम नागरिक की परेशानी के
बारे में ।
आदरणीय श्रीमान,
मैं आपको यह पत्र लिख रहा हूँ जसमें मैं आपको इसका कारन एवंम निवारण दोनों के बारे में बता रहा हूँ।
(१) आय कर में चार्टर्ड अकाउंटेंट दवारा अपनी ऑडिट रिपोर्ट में कॉलम 16D में यह दर्शाया की व्यापारी की इस व्यवसाय के यह अतिरिक्त यह आय है।
(I ). बैंक की बयाज,किराये की आय,खेती से आय,अन्य बयाज, वेतन,रिफंड पर बयाज इत्यादि।
(II).शेयर्स पर डिविडेंड्स, LIC पालिसी MATURE की रकम, एलपीजी की सब्सिडी या अन्य कोई सब्सिडी,मुक्त वेतन या कोई भुगतान।
और व्यापारी ने यह सभी इनकम उसको उनकी हेडवाइज आयकर विवरणी में दर्शाया तथा उस पर नियमानुसार कर का भुगतान कर दिया। परन्तु कर निर्धारण के समय विभाग द्वारा इसको व्यवसयिक आय में जोड़ दिया तथा HEADWISE भी मान लिय। इस प्रकार एक ही आय की रकम पर दो बार कर लगाकर उसके विरुद्ध मांग निर्धारित की है।यह विधान के विरुद्ध तथा कर निर्धारति के साथ अन्याय है। वास्तव में इस में कर निर्धारति का कोई दोष नहीं है। यह एक परकिरया या तकनीक भूल या चार्टर्ड अकाउंटेंट इंस्टिट्यूट के निर्देश में अंतर है। इसलिए शयद यह हुआ है। आपसे निवेदन है के इसे प्रथम भूल मानकर वयवसायी को इससे मुक्त करें और सभी क़ी मांग को हटाएँ ताकि सभी इस प्रभाव से बच जाएँ ,इससे व्यवसायी के साथ विभाग क़ी समस्या भी दूर होगी।
2.कुछ कर निर्धारति विशेषकर कच्ची आढत वालों का कर जमा की कटौती 26 AS में घोषित/ दिखाई दे रही है।परन्तु CPC दवारा पता नहीं किस कारन से उसका सम्पूर्ण क्लेम नहीं दे रहे हैं। और साथ ही जो भी कर निर्धारण का आदेश आता है उसमे भी यह जानकारी नहीं मिलती की कोनसा/किस पार्टी का कितना टैक्स कटौती का क्लेम दे रहें हैं और किसका क्लेम नहीं दे रहे। और जब कर निर्धारति संसोधन क़े लिए एक प्रार्थना पत्र पेश करता है कि 26AS में सम्पूर्ण कर कटौती/ कर जमा दिखाई दे रहा है तो फिर भी वही का वही कर निर्धारण आदेश प्राप्त होता है अर्थार्त सम्पूर्ण कर कटौती का क्लेम नहीं दिया जाता।
हाँ एक बड़ी ही आश्चर्यजनक परन्तु सत्य “भूल सुधार के लिए एक प्रार्थना पत्र प्रार्थना पत्र दाखिल करने क़े कुछ सेकंड में ही नया संसोधित कर निर्धारण आदेश प्राप्त हो जाता है जैसे की विभाग पहले ही तैयार रहता है की प्रार्थना पत्र को रिजेक्ट करना है।हम लोग काफी समय लगा कर तो उसे तैयार करतें हैं।परन्तु विभाग उसे नजर अंदाज़ कर देता है।अगर विभाग हमारे प्रार्थना को सही मायनो में पढ़े और उसका सही निस्तारण करे तो कर निर्धारति की मांग भी नहीं रहेगी और विभाग की परेशानी भी समाप्त हो जाएगी।और बिना वजह काम भी नहीं बढ़ेगा। मुझे तो यह लगता है की प्रार्थना पत्र को देखने की चेस्टा ही नहीं करते की उस में प्रार्थी ने क्या लिखा है या उसने क्या चाहा है। तो आखिर भूल सुधार के लिए प्रार्थी क्या करे। उसकी सुनवाई कैसे होगी।
मुझे आशा ही नहीं पूर्ण विश्वाश है क़ी मेरे इस प्राथर्ना पत्र को स्वीकार कर आप सभी व्यवसायी का विश्वाश प्राप्त करें। कर निर्धारति दवारा कोई भी आय न तो छुपाई गई है और न ही विभाग दवारा कोई नई आय जोड़ी गयी है।
आपका धन्यवाद्।
भवदीय ,
दिनांक 08.03.2023 ओम प्रकाश कालरा
Can I file 154 application for an order passed u/s 154 of the act
Received Intimidation Order for AY 2021-22 under 143(1) on Aug’ 2021. TDS on dividends though reflected in 26AS as also in Order under 143(1), was not allowed. Grievance raised immediately, ollowed by “Rectification” under “Reprocess” of ITR on such advice by CPCITR. Rectification Order under 154 still did not allow TDS. Rectification under “TDS Mismatch” preferred. Again on 2.12.2022 Order under 154 says, “Found no mismatch”. What is my remedy?
I file my ITR for AY 2022-23 in the first week of July 2022. When it was not processed till Sept 2022. I filled Revised ITR on 23 Sept 2022 and processed on the same day evening with Demand of Rs. 5000 for Late Filing of Income Tax Return – 234f. As it was not Late, I open the tab of Rectification. There was no other option except reprocess my ITR u/s 154. Now, how much time the tax department will take and what is the possibility. After that, what is the further procedure.
Please check your original itr whether it is e-verified or not. is it made invalid by CPC
For AY20-21, I received order U/s-143(1) where demand INR 14500/- was raised by department which was to be covered U/s 80C but left by mistake, was not responded and some time later I received rectification order U/s154. Where the department with hold my refund of AY 21-22 against demand of AY 20-21. Tha matter came to notice in Dec-21 since then I am trying to file a revised return but customer service if IT department never helped me. Can I get this refund by any way?
I had received intimation u/s 143(1) for the return filed with demand. I filed revised return and applied for rectification. Order passed u/s 154 is also wrong now. Now I want to know what should be done further as there is mistake in the order and in rectification order mistake remains
Dear Sir/ Mam,
Can i appeal against an tds intimation u/s
200A/206CB of the income tax act, 1961.
143(1) intimation received and demand raised in it. Rectification has been filed against 143(1).
order passed u/s 154 is also wrong. Now what should i do
As I understand, although intimation u/s 143(1) is not an order and appeal can not be filed …but in your case if application u/s 154 has been entertained & order also been passed… Now one can file appeal against order received u/s 154.
In tax returns my mistake i had filled the table for TCS instead of TDS income tax department raised nature of demand. I am rectification also done but again income tax department issue letter Nature of demand 154 and demand 11499
RECTIFICATION U/S 154 FILED AFTER 07 YEARS TO CLAIM UPDATED TDS IN 26AS. WILLIT BE HIT BY SECTION 154(7) OF ITACT?
I am a Defence Service pensioner. I had received revised pension in Nov 2020 along with arrears since 01 Mar 19 . I had filed Form 10E u/s 89(1) for AY 21-22 on line for Tax Relief u/s 89 on pension arrears amount(self calculated, break down of arrears for FY 19-20 and FY 20-21 not given by employer-SBI) relating to FY 19- 20 on 08 Sep 21 before e-filing ITR-1 on 09 Se p 21. ITD has raised a demand vide Income Tax Intimation u/s 143(1) reflecting Tax Relief “0” against my submitted data data of Tax relief amount in the ITR.
Can I request for Rectification u/s 154 if yes how? There is no link of “Rectification” under “Services” tab on e filing new portal. Request advice,
નમસ્તે,
મને AY 2020 – 21 માટે IT રિટર્ન ફાઈલ કરવામાં આવ્યું હતું. તે રિફંડનો કેસ હતો, હું 26AS મુજબ રિફંડનો દાવો કરી રહ્યો હતો
મને 143 (1) અને 154 u/s હેઠળ સુધારો ઓર્ડર મળ્યો છે, કહ્યું કે કોઈ રિફંડ બાકી નથી . પરંતુ, 26AS માં ટીડીએસ કાપવામાં આવ્યું હતું. તેથી, કૃપા કરીને તેના પર સલાહ આપો.
Hi,
i was filed IT returns for A.Y 2020 – 21. It was refund case, I was claiming refund as per 26AS
I have received intimation u/s 143(1) and rectification order u/s 154, saying there is no refund due. But, in 26AS tds was deducted. So, please advise on the same.
I received 7th pay commission arrears in AY 20-21 pertaining to AY 16-17 and AY 17-18. I claimed relief u/s 89 and submitted form 10E also. However CPC Bengaluru passed an order without considering tax relief u/s 89. Can I submit rectification request for the same?
mistake has been done while filing advance tax for AY2019-20, wrong pan mentioned, we have corrected with AO and its showing in FORM 26AS but for AY 2019-20, return cant be revised please help me how can i claim this amount of income tax refund
What if we fails to reply intimation u/s 154 within time limit of 4 years.
my pan card number AINPS 1414N was wrongly showed in IT Return for AY 2020-21 submitted online as AJNPS1414N.How can it be rectified.pl clarify
In tax returns by mistake I had filled the table for TCS instead of TDS.
Income tax department raised demand for payment.
In response to my rectification request they have rejected it saying that this can not be entertained as it involves reduction in tax liability.
Hi,
I have received SMS/e-mail from income tax department saying rectification return for PAN: xxxx for AY 2018-19 and ACK No.xxxx has been processed at CPC. In the attachment, “net amount payable” is mentioned as Rs. 3000/-. I didn’t file for any rectification. Does this mean I have to pay this extra amount now?
Thanks.
Shamika
Its same with me.
The procedure is OK. But what to do if the Rectification order continues to show the same mistake. In my case the Intimation Under Section 141 has not taken into account the TDS paid by me. The TDS is appearing in form 26AS. I have checked the return, there is no error in filling the ITR. TDS is shown correctly with correct TAN nos. which match with form 26AS. I had filed a rectification request through e-filing portal. Despite apparent error I have received an order u/s 154 keeping the position unchanged raising a demand instead of Tax Refund due to me. What is the next step to get the order rectified.
you can file appeal to commisioner of income tax with
facts of thhe case