Law: Income Tax Act, 1961

Section: 147,154

(a) Income-tax-Rectification of mistake---Mistake should be apparent from record--­Meaning of "record "---Record refers to record available to Authority at the time of initiation of rectification proceedings and not merely record of original proceedings sought to be rectified---Order of assessment for immediately preceding year which was rectified could form the basis of rectification proceedings---Indian Income Tax Act, 1961, S.154. Section 154 of the Income Tax Act, 1961, opens with the orders "with a view to rectifying any mistake apparent from the record... "The term "record" is not defined in the section or in the definition section of the Act. For-determining the true scope of this provision and the meaning to be properly assigned to the term "record" it is necessary to keep-in view the object of the provision and the nature of the power conferred on the authorities under that provision. The absence of definition cannot have the consequence of limiting its meaning to a very narrow and limited sphere of the record of the original proceedings alone. The object with which power is conferred by section 154 is as stated in the marginal heading "rectification of mistake". The principal condition for exercising the power under section 154 is the existence of a mistake in the record. The mistake is not to be a mistake which requires in-depth probing to discover but is a mistake which is "apparent" from the record. The power conferred by this provision is only to enable the authorities to rectify the "apparent" mistakes in the record. The record referred to is the record which the authorities are required to examine 'for the purpose of rectifying mistakes in the orders mentioned in sub-­clauses (a), (b) and (c) of section 154(1). The section does not either expressly or implicitly require that the authorities exercising power under this provision should limit their attention only to the order sought to be rectified. The requirement that the mistakes in the record be "apparent" does not imply that no other relevant document should be looked into. If in the light of other legally valid orders it- is found that the original order contains mistakes which are apparent,…

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