Law: Income Tax Act, 1961

Section: 154

Income-tax----Rectification of mistake---Assessment--Status---Scope of power of rectification--Mistake apparent from record alone can be rectified--Does not entitle ITO to review his order---Income-tax Officer making assessment in the status of registered firm---Income-tax Officer cannot change status of assessee to that of association of persons under S. 154, Indian Income Tax Act, 1961. Under section 154 of the Indian Income Tax Act, 1961, only mistakes apparent from the record can be rectified. The section does not give power to the Income-tax Officer to change his opinion and review his order: Held, that, in the instant case, the Income-tax Officer had made an assessment treating the assessee as a registered firm. The Tribunal cancelled the registration. Thereafter, the Income-tax Officer had no jurisdiction under section 154 to rectify the order of assessment and change the status of the assessee to that of an association of persons. C.I.T. v. Bhawani Prasad Girdhari Lai & Co. (1990)-186 ITR 518 (All.) ref. JUDGMENT R. A. SHARMA, J. ---At the instance of the Department, the Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under section 256(1) of the Income Tax Act, 1961, for the opinion of this Court: "Whether, on the facts and in the circumstances of the case, the s Tribunal is justified in holding that there was no mistake apparent from the F record and that, as such, action under section 154 was not justified?" The assessee-firm, for the assessment years 1966-67 and 1967-68, was assessed in the status of a registered firm. The Income-tax Officer subsequently, in exercise of his powers under section 186(1) of the Income-tax Act. 1961 (hereinafter referred to as the Act), cancelled the registration of the assessee-firm, vidc order dated March 24, 1975, on the ground that the assessee-firm consisted of more than 20 persons which is prohibited by section 11(2) of the Companies Act, 1956, and was, as such, illegal and is not liable to be registered. It was further held that the assessee-firm is to be assessed in the status of an unregistered firm. However, the Income-tax Officer, later on purporting to act under…

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