10 August 2011
what is the difference b/w rectification u/s 154 and reassessment u/s 147. Indeed, its really difficult to sort out the issue whether the mistake was apparent or the income has escaped assessment. If excessive relief was granted than AO will take action under which section and why.
One can apply for rectification only when there is a mistake apparent from record or in other words, when there is no dispute or no legal debate required, like calculation mistake etc. whereas reassessment is applicable when any income has escaped from tax and that is only when AO is having reason to belive. i.e. he should have concrete proof of the same.
10 August 2011
In case of excessive relief granted by the A O, if mistake is apparent from the records he can rectify the same U/s 154.
If the mistake comes to notice at a later stage, due to certain information, or omissions found on calculations etc. and it is found that the income is escaping assessment, Section 147 comes into action.
Apparent means no extra effort is required to me made. From the face of the records , these can be adjudged.
In case of reassessment ITO could have done " technical analysis" of the return. He is to record the reasons and has also to obtain permission of JCIT or Higher Authority.
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