All about rectification under section 154

Introduction – Rectification application maybe filed u/s 154 of the Income Tax Act by the taxpayer in case of any mistake apparent from the record.

An Income Tax authority may:

a) amend any order passed by it under the provision of this Act

b) amend any intimation or deemed intimation under sub-section (1) of Section 143.

Subject to the other provisions of this section, the authority concerned,

a) may make an amendment under sub-section (1) of its own motion,

b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee.

Pre-Requisites to file online Rectification Request U/s. 154

1. The Income Tax Return for the Assessment Year should have been processed in CPC, Bangalore.

2. An Intimation under Section 143(1) OR an order under Section 154 passed by CPC, Bangalore for the e-Filed Income Tax return should be available with the taxpayer.

3. For Electronic returns filed and processed at CPC, only online rectifications will be considered.

4. If the refund arising out of return processed at CPC is adjusted against the demand of other
   Assessment Years and then the assessee is challenging the demand itself, in that case

i)   Rectification application has to be filed for the demand year, if the demand was raised by CPC then online application has to be filed

ii)   for the demand raised by the Field Assessing Officer, the application has to be filed before him.

1. No rectification has to be filed for giving credit to taxes paid after raising the demand.

2. To file your Rectification, you should be a registered user in e-Filing application

Below listed are the steps to file Rectification for Rectification:

Step 1 – LOGIN to e-Filing application and GO TO –> My Account –> Rectification request.

Step 2 – Select the Assessment Year for which Rectification is to be e-Filed, enter Latest Communication Reference Number (as mentioned in the CPC Order), and Latest CPC Order Date (as mentioned in the CPC Order).

Step 3 – Click ‘Submit’.

Step 4 – Select the ‘Rectification Request type’

–> ‘Taxpayer Correcting Data for Tax Credit mismatch only’ − On selecting this option, three check boxes, TCS, TDS, IT, are displayed. You may select the check-box for which data needs to be corrected. You can add a maximum of 10 entries for each of the selections. No upload of an Income Tax Return is required.

–> ‘Taxpayer is correcting the Data in Rectification’ − select the reason for seeking rectification, Schedules being changed, Donation and Capital gain details (if applicable), upload XML and Digital Signature Certificate (DSC), if available and applicable. You can select a maximum of 4 reasons

–> ‘No further Data Correction required. Reprocess the case’ − On selecting this option, three check-boxes, Tax Credit mismatch, Gender mismatch, Tax/ Interest mismatch are displayed. You may select the check-box for which re-processing is required. No upload of an Income Tax Return is required.

Step 5 – Click the ‘Submit’ button.

Step 6 – On successful submission, an Acknowledgment number is generated and sent for processing to CPC, Bangalore.

Post processing, either the rectification order under Section 154 will be issued

Common Errors in Rectification

a. Important Notes before e-Filing Rectification Request

1. You must file using the latest CPC Order for the selected Assessment Year. For eg: If an order has been passed by CPC on 27th September, 2013 and another order has been passed on 15th December, 2013, the assessee can e-File ONLY using the latest i.e. 15th December, 2013 order.

2. You can file another Rectification for the same Assessment Year ONLY if the previous Rectification request is processed.

3. The CPC order details can be used ONLY once to file a Rectification. Any subsequent Rectification should be filed using new/latest CPC order details. However, the same CPC Order details can be re-used if the e-Filed Rectification has been withdrawn by the assessee ( Note: Time for withdrawal is 7 days from date of e-Filing the Rectification)

4. The rectification request can be withdrawn within 7 days if submitted by mistake or the request needs to be amended. LOGIN and GO TO ‘My Account’ –> ‘Rectification status’ to withdraw the Rectification.

b. Tips to the user on filling the Income Tax Return

The complete Income Tax Return should be e-Filed and NOT just the schedules/ fields that need change/correction. However, there should NOT be any revision in Income or new claims of deduction/ exemption made in the Rectification request, as this would lead to rejection or delay in processing by CPC. Please note that this facility is only provided by Income Tax Department for correcting mistakes. In case you wish to make changes in Income or make new claims, a Revised Income Tax Return should be filed as per the Income Tax Act, 1961.

c. Common mistakes while filing Rectification

1. It is noticed that Communication Reference Number mentioned in the CPC Order (u/s 143(1) or 154) is entered wrongly. It must be mentioned exactly as it appears on the CPC order.

2. Right Assessment Year should be selected.

3. The complete Income Tax Return should be e-Filed and NOT just the schedules/ fields that need change/correction.

4. In case of change in ‘Income’, a rectification should NOT be filed. A revised Income Tax Return should be filed in this case, of course, subject to the time limit as per the Income Tax Act, 1961.

5. In case of change in ‘Bank Account details’ OR ‘Address Details’, a Rectification should NOT be filed. You can LOGIN and GO TO My Account –> Refund Re-issue request and ra;ise a request for change in the Bank Account/Address details (in case of refund failure).

Courtesy : ICAI Journals, News papers and Own

Pallav Singhania