As per section 154(7) no
amendment under this section shall be made after the expiry of four years from the end of the financial year in
which the order sought to be
amended was passed
As per Section 154(8), Without prejudice to the
provisions of sub-section (7), where an application for amendment under
this section is made by the assessee or
by the deductor on or after the 1st day of June, 2001 to an income-tax
authority referred to in sub-section (1), the authority shall pass an order,
within a period of six months from the end of the month in which the
application is received by it,—
(a) making the amendment; or
(b) refusing to allow the claim
CIRCULAR NO. 14/2001 Dated- 9-11-2001 Issued by CBDT
Clarified that Considering the
absence of any specific time-limits regarding disposal of application for
rectification under section 154, and with a view to ensure time-bound disposal
of rectification applications, the Act has inserted a new sub-section (8) in
section 154 to provide that where an application for amendment under this
section is made by an assessee on or after 1st June, 2001 to an income-tax
authority referred to in the said section, the authority shall pass an order
within six months from the end of the month in which the application is
received by it, either making the amendment or refusing to allow the claim. The overall time-limit of four years
provided in the section for passing any rectification order shall however
continue to apply. In other words, the period of six months mentioned
in the new sub-section (8) cannot extend, under any circumstances, beyond the
overall time-limit of four years from the end of the financial year in which
the order sought to be rectified was passed. These amendments will take effect
from 1st June, 2001.
Means if 6 months lapse then also the authority concerned can
pass order within four years from the end of financial year in which the order
sought to be amended. –
The
department cannot take any coercive measure or recover any outstanding dues
without first disposing of the assessee’s petition. In this regard, reference
may be made to a judgement in the case of Sultan Leather Finishers (P)
Ltd. vs. ACIT 191 ITR 179 (All.)
If
inspite of reminders and persuasion, the A.O. is still not disposing of the
rectification petition, the only legal option available to the assessee is to
file a writ petition of “Mandamus” for securing judicial enforcement
of public duties, performance of which has been wrongfully refused before the jurisdictional High Court
The
Hon’ble Kerala High Court in the case of Smt. Rajamma vs. ITO 152 ITR
657(Ker), where
the A.O. was not disposing of the rectification petition u/s. 154, held
that an application for relief cannot be kept in cold storage and directed the
A.O. to dispose of sec. 154 application within one month from the date of
receipt of the order.
However,
to avoid the cost, one option available to the assessee is to approach Income-tax Ombudsman by
filing a complaint with him for non-disposal of sec. 154 petition by the A.O. as
per Income Tax Ombudsman Guidelines, 2006 .
