Rectification of Mistake
Introduction
Income-tax authorities have the power to rectify mistakes in their orders if the error is apparent from the record. Rectification may be initiated by the authority itself or upon a request from the assessee, deductor, or collector.
Orders Eligible for Rectification
The Income-tax authority can rectify apparent mistakes in:
- Any order it passes
- Intimations after processing IT returns
- Intimations after processing TDS/TCS statements
Exceptions:
- Appeal/Revision cases: Cannot rectify parts already considered in appeal or revision proceedings (but can rectify other mistakes in the same order)
- Post-notice intimations: Cannot rectify intimation mistakes after issuingSection 143(2) scrutiny notice
Authorities Empowered to Rectify Mistakes
- Assessing Officer (AO)– For assessment orders.
- CIT(A) / JCIT(A)– For appeal orders.
- ITAT– For appellate orders.
- TPO– For arm’s length price determinations.
Time Limits for Rectification
|
Order Type |
Time Limit for Rectification |
|
AO / CIT(A) / JCIT(A) orders |
4 years from the end of the financial year in which the order was passed |
|
ITAT orders |
6 months from the end of the month in which the order was passed |
|
TPO orders |
4 years from the end of the financial year in which the order was passed |
If an assessee applies for rectification, the authority must pass an order within 6 months from the end of the month in which the application is received.
Procedure for Rectification
- If rectification increases tax liability or reduces a refund, the assessee must be given an opportunity of being heard.
- A written rectification order must be issued.
- If additional tax is payable, a demand notice is served.
- If tax liability reduces, a refund is issued.