CBDT Empowers Commissioner (CPC, Bengaluru) with Authority to Rectify Assessment Errors

CBDT Empowers Commissioner (CPC, Bengaluru) with Authority to Rectify Assessment Errors

Issue: To streamline the central processing of Income Tax Returns (ITR) and ensure administrative efficiency, the Central Board of Direct Taxes (CBDT) issued an order granting specific statutory powers to the Commissioner of Income Tax (CIT) at the Central Processing Centre (CPC), Bengaluru.

Facts:

• The CPC in Bengaluru is the automated hub responsible for the centralized processing of almost all electronically filed ITRs nationwide (under Section 143(1) of the Income Tax Act).
• This massive volume of automated processing occasionally results in errors, either factual or arithmetical, which need quick and centralized rectification.
• The CBDT recognized the need to delegate statutory powers to the head of the CPC to efficiently handle rectifications and consequential demand notices without bureaucratic delays.

Decision:

The CBDT issued an order conferring statutory powers upon the Commissioner of Income Tax, CPC, Bengaluru to undertake specific functions related to the rectification of processed returns and the issuance of tax demands.

Key TakeDowns:

• Power to Rectify: The CIT (CPC) is now explicitly empowered to pass orders for rectification of mistakes that are apparent from the record (under Section 154 of the Income Tax Act). This allows for the correction of factual or arithmetical errors arising from automated processing.
• Authority to Issue Demand Notices: Consequent to any rectification or assessment order, the CIT (CPC) is authorized to issue necessary notice of demand (under Section 156 of the Act) and initiate recovery proceedings where an additional tax liability is determined.
• Enhanced Administrative Efficiency: This delegation centralizes the authority to rectify errors and issue demands arising from the automatic processing of returns, eliminating the need to refer these matters back to local jurisdictional Assessing Officers (AOs). This improves speed, consistency, and administrative efficiency for millions of taxpayers processed through the CPC.
• Focus on Centralization: The move underscores the CBDT’s commitment to consolidating essential administrative and quasi-judicial functions related to automated ITR processing under the CPC’s direct control.