Rectification Of Mistakes [Section 154]

• Manner of rectification of a mistake apparent from the record - With a view to rectifying any mistake apparent from the record, an income tax authority referred to in section 116 may.

• The jurisdiction of any authority under the Act to make an order under section 154 depends upon the existence of a mistake apparent on the face of the mistake apparent from the record.

• Mistake apparent from the record may be a mistake of fact as well as mistake of law - For instance, the treatment of non-agricultural income as agricultural income and granting exemption in respect of such income is an obvious mistake of law which could be rectified under section 154.
  
  
• Mere change of opinion cannot be basis for rectification - A mere change of opinion, however, cannot be the basis on which the same or the successor Assessing Officer can treat a case as one of rectification of A mistake is one apparent from the record in case, where it is a glaring, obvious, patent or self- evident. Mistake, which has to be discovered by a long drawn process of reasoning or examination or arguments on points, where there may be two opinions, cannot be said to be mistake or error apparent from the record.
  
  
• Subsequent decision of Supreme Court - A mistake arising as a result of subsequent interpretation of law by the Supreme Court would also constitute error apparent from the
  
  
• Retrospective amendment of law - could also lead to rectification if an order is plainly and obviously inconsistent with the specific and clear provision, as amended

Doctrine of Partial Merger

Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to a rectifiable order, the authority passing such order may, amend the order in relation to any matter other than the matter which has been so considered and decided.

Amendment may be suo motu or the same may be brought to notice by the assessee or deductor or collector

The concerned authority may make an amendment on its own motion. However, he should mandatorily make the amendment for rectifying any such mistake which has been brought to its notice by the assessee or the deductor or the collector. Where the authority concerned is the Commissioner (Appeals), the mistake can be pointed out by the Assessing Officer also.

Opportunity of being heard to be given to the assessee or deductor or collector before enhancing an assessment or reducing a refund

An amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee or the deductor or the collector, shall not be made unless the authority concerned has given notice to the assessee or the deductor or the collector of its intention so to do and has allowed the assessee or the deductor or the collector a reasonable opportunity of being heard.