Rectification Application Under Section 154 for Rectifying the Mistake by making a claim under the Correct SectionWhether Maintainable?

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The Tax Publishers Income Tax--Rectification Application Under Section 154 for Rectifying the Mistake by making a claim under the Correct Section--Whether Maintainable? Akhilesh Kumar Sah The learned author in this write-up deals with the scope of Section 154. The provisions of Section 154 enable an officer to rectify a mistake apparent from record, meaning thereby this section addresses those errors that are evident from record. An error apparent on face of record must be such an error which must strike one on mere looking at the record and would not require any long drawn process of reasoning on the points where there may conceivably be two opinions. An error which is not self-evident and has to be detected by a process of reasoning can hardly be said to be an apparent. The jurisdiction under Section 154 is wider than that provided under order 47, Rule 1 pf CPC. This is so because under order 47, Rule 1 of CPC it is not permissible for erroneous decision to be 'reheard and corrected'. He concludes that rectification can be allowed even if there is misquote of section under the Act. 1. Introduction The scope and ambit of power of rectification came to be considered and decided by the Supreme Court in T.s. Balaram, ITO v. Volkart Brothers [(1971) 82 ITR 50 (SC) : ( 1971 TaxPub(DT) 355SC)], wherein it was held that the power of rectification of mistakes under Section 154 of the Income Tax Act, 1961 (for short, 'the Act') is a very limited power which is restricted to rectification of mistakes apparent from the record. Besides, it must be a mistake which is patent on the face of the record and does not call for detailed investigation of the facts or require an elaborate argument to establish it. It does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. The mistake sought to be rectified must be manifest and self-evident on the face of the record. It must be one which is apparent and not lurking, which is visible and not dormant, which can be seen and not hidden. It cannot be demonstrated to exist by relying upon materials outside the record. A decision on a debatable point of law or failure to apply the law to a set of facts which remain to be investigated cannot be corrected by way of rectification. The legal position is thus now settled that a mistake which is not obvious, patent and self-evident and mistake on which conceivably there can be two opinions cannot be rectified by way of rectification of mistake under Section 154 of the Act. In other words, in the garb of exercise of the power of rectification under Section 154 of the Act, the income-tax authorities cannot revise or review their order generally or reconsider the conclusions arrived at therein on the facts before them at that time on the basis of new facts brought on record by the party seeking rectification or coming into possession otherwise, because the jurisdiction under Section 154 is confined to rectification of mistakes apparent from the record. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Rectification

Application Under Section 154 for Rectifying the Mistake by making a claim under the Correct Section--Whether Maintainable?

Akhilesh Kumar Sah

The learned author in this write-up deals with the scope of Section 154. The provisions of Section 154 enable an officer to rectify a mistake apparent from record, meaning thereby this section addresses those errors that are evident from record. An error apparent on face of record must be such an error which must strike one on mere looking at the record and would not require any long drawn process of reasoning on the points where there may conceivably be two opinions. An error which is not self-evident and has to be detected by a process of reasoning can hardly be said to be an apparent. The jurisdiction under Section 154 is wider than that provided under order 47, Rule 1 pf CPC. This is so because under order 47, Rule 1 of CPC it is not permissible for erroneous decision to be 'reheard and corrected'. He concludes that rectification can be allowed even if there is misquote of section under the Act.

1. Introduction

The scope and ambit of power of rectification came to be considered and decided by the Supreme Court in T.s. Balaram, ITO v. Volkart Brothers [(1971) 82 ITR 50 (SC) : ( 1971 TaxPub(DT) 355SC)], wherein it was held that the power of rectification of mistakes under Section 154 of the Income Tax Act, 1961 (for short, 'the Act') is a very limited power which is restricted to rectification of mistakes apparent from the record. Besides, it must be a mistake which is patent on the face of the record and does not call for detailed investigation of the facts or require an elaborate argument to establish it. It does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. The mistake sought to be rectified must be manifest and self-evident on the face of the record. It must be one which is apparent and not lurking, which is visible and not dormant, which can be seen and not hidden. It cannot be demonstrated to exist by relying upon materials outside the record. A decision on a debatable point of law or failure to apply the law to a set of facts which remain to be investigated cannot be corrected by way of rectification. The legal position is thus now settled that a mistake which is not obvious, patent and self-evident and mistake on which conceivably there can be two opinions cannot be rectified by way of rectification of mistake under Section 154 of the Act. In other words, in the garb of exercise of the power of rectification under Section 154 of the Act, the income-tax authorities cannot revise or review their order generally or reconsider the conclusions arrived at therein on the facts before them at that time on the basis of new facts brought on record by the party seeking rectification or coming into possession otherwise, because the jurisdiction under Section 154 is confined to rectification of mistakes apparent from the record.