The Law not applied – a mistake apparent from the record

Rectification of mistake.

154. [(1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,—

(a)			amend any order passed by it under the provisions of this Act ;
[(b)			amend any intimation or deemed intimation under sub-section (1) of section 143;]]
[(c)			amend any intimation under sub-section (1) of section 200A;]
[(d)			amend any intimation under sub-section (1) of section 206CB. ]

1. The purpose of this study is to examine the scope of the usage "rectifying any mistake apparent fromthe record", as appearing in section 154. The pre-condition for the rectification of any mistake is that it should be an apparent mistake, obvious from the record. Interestingly, the terms mistake, apparent, &the record have not been defined in the Act, hence are subject to judicial interpretation.

2. The judiciary has time and again come to the rescue of the beleaguered assessees in according a just and fair interpretation to the terms mistake & apparent, so that the assessee is not exposed to post-assessment consequences, in the nature of appeal, which could not only be harsh and uncertain, but also costly, time consuming and unwarranted, specially when the assessee does not have a natural right of appeal. The fact remains uncontested that the tax proceedings can be ruthlessly crucifying, than even the criminal proceedings. It is submitted that the judiciary has largely clarified the said terms mistake & apparent, and the heat and dust attendant there to seem to have largely settled. Hence no much emphasis is accorded to these terms in this article.

3. However, the term "the record" has not been subject to intensive judicial examination leaving the said term wide open to interpretation. The significance of the said term "the record" is analysed by attempting answers to the following questions :

3.1 Whether the AO should rectify the order/ intimation, in case the assessee does not produce a favourable judgment at the assessment stage, but after the assessment, relying on a favourable judgment, applies for rectification of mistake apparent from "the record" u/s 154?

3.2 Whether the judgments already pronounced by the courts or tribunals (whether jurisdictional or otherwise), whether pre or post passing of the order or intimation by the AO, would fall within the meaning of "the record", for the purpose of S 154, irrespective of whether the assessee relies on them or not at the assessment stage?

3.3 Whether the AO should be permitted to argue that only such law, as is placed before him by the assessee, constitutes "the record", to the utter oblivion of the law that holds good, though not brought to the notice of the AO by the assessee?

3.4 Whether the AO would be correct in arguing that the law as enunciated by the courts or tribunals, would constitute "the record" for the purpose of S 154, only when it is brought to his notice by the assessee in the assessment proceedings& that not bringing such law to his notice, makes it extraneous to "the record", lacking application?