Rectification required in process of Rectification in Income Tax Act 2025

An assessee, on receipt of an assessment order from the CPC, the Assessing Officer (AO), NFAC, the Commissioner of Income Tax (Appeals), Income Tax Appellate Tribunal (ITAT), and the Commissioner of Income Tax (CIT), within 30 days, either he has to pay the tax if there is any demand, or else he can prefer an appeal before the CIT (Appeals), ITAT or High Court as the case may be, if he disagrees the order passed. But if the assessee finds a mistake, a rectification petition can be filed under Clause 142 of the Income tax Act 2025. For this also the assessee is given time of 30 days as given for payment of tax or for appeal. If there are mistakes and if rectification order is passed either the demand, will get reduced or there won’t be any demand at all. As per the present Act the Assessing Officer/CPC/NFAC/CIT/ ITAT can take six months (repeat SIX MONTHS) time to dispose of the rectification petition.

In addition, if the rectification petition is not attended to within six months nobody can question the Income Tax Department for their failure to attend to the genuine request by the assessee, which is clear violation principles of natural justice. It is not just and equitable to direct the assessee to respond within 30 days (1 month) for payment of the wrong demand and the department will take 6 months to rectify or reject the petition or keep quiet. To be fair and equitable, the Income Tax Act 2025 should have been drafted in such a way that the Assessing Officer/CPC/NFAC/CIT/ITAT will also be given time of 30 days only for rectification and if the rectification order is not passed rejecting the petition within the time allowed, the petition made should be deemed to have been allowed and once the rectification petition is filed the assessee should automatically be given time till the disposal of the petition to pay tax as well as to prefer an appeal. Many assessees are suffering because even clerical errors are not rectified and are made to pay huge amounts as tax as per the Income Tax Act 1961 and this anomaly has not been rectified and continues in the Income Tax 2025 also.

Alternatively, if he prefers an appeal, he has to pay the demand and file an appeal. But if he is not able to pay the demand in full, he must apply for granting stay for the collection of taxes to the jurisdictional income tax officer to grant stay. Ironically, while the officer concerned has power to stay only 20% of the demand, why the law should not be changed to the effect that if the assessee is not able to pay the entire demand and if he is going to file an appeal it is sufficient if he pays 20% of the demand and file an appeal with proof of payment of 20% of the demand. Ultimately if he is in such a position that he is not able to pay even the 20% of the demand he may be required to make a representation to the jurisdictional officer or the Commissioner for stay of collection of the entire demand or for payment of lesser percentage from that of 20% and stay should be granted till the disposal of the appeal. This will reduce lot of time spent applying for ‘Stay’ and considering the application by the Jurisdictional Officer/ Commissioner and granting the same.