Law: Income Tax Act, 1961

Section: 154,154(1)(b),271,275

(a) Income-tax-----Rectification of mistakes ---Penalty---ITO has power to rectify a mistake in order levying penalty---Indian Income Tax Act, 1961, Ss. 154 & 271. (b) Income-tax--- ----Penalty---Rectification of mistakes---Limitation---Order of penalty passed within time limit prescribed in S.275---Section 275 does not apply to order rectifying such order of penalty---Time limit laid down in S.154 alone will apply to order of rectification---Indian Income Tax Act, 1961. Ss,154, 271 &. 275. The expression "any order passed by him" occurring in section 154 of the Income Tax Act, 1961, brings within its scope every order passed by the Income-tax Officer under the Act and that would necessarily include the order passed by the Income-tax Officer under section 271 of the Act as well. Secondly, section 154(1)(b) of the Act empowers the Appellate Assistant Commissioner to amend any order passed by him under section 150 or 271 of the Act and it shows that Parliament has empowered the Appellate Assistant Commissioner and he is one of the authorities mentioned in section 271 of the Act to levy penalty, to rectify the order of penalty passed by him under section 271 of the Act. If that is the intention of parliament, there is absolutely no reason why the power of rectification should be denied to the Income-tax Officer who is also one of the authorities mentioned in section 271 of the Act to levy penalty. Thirdly, the question whether the order can be rectified under the provisions of section 154 of the Act, has to be tested on the language employed under section 154 of the Act and the condition prescribed under section 154 of the Act. If the ingredients found in section 154 of the Act are satisfied, the order passed by the Income-tax Officer under section 271 of the Act is also liable to be rectified. The provisions of section 275 of the Act would apply only to the case of the first order of penalty passed by the authority. If the order of penalty was passed within the time limit prescribed under section 275 of the Act, it is not necessary to refer to the time limit prescribed under section 275 of the Act, if there are mistakes in the order of penalty. The source…

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