Section 154 of the Income Tax Act allows correction of “mistakes apparent from the record” in tax orders or intimations issued under Sections 143(1), 200A (TDS), 206CB (TCS), or any assessment order. These corrections can be made:
- Suo moto (on the tax officer’s own)
- On taxpayer’s request
It applies only to clear, obvious errors (e.g., computational mistakes, arithmetical errors, incorrect factual data)—not disputes requiring investigation.
Key Features
- Applicable Orders
- Assessment orders, intimation under Sec 143(1), TDS/TCS processing.
- Who Can File
- Taxpayer, e-filing representative, or tax officer itself; refunds, demands, or TDS/TCS details can be corrected .
- Time Limits
- Suo moto corrections: Up to 4 years from end of FY in which original order passed .
- Taxpayer-initiated: Authority must respond (amend or reject) within 6 months from end of month application received.
- Notice Requirement
- If rectification increases tax or reduces refund, the taxpayer must be given opportunity to be heard.
- Limitations
- Cannot alter income via new deductions or exemptions—need a revised ITR instead.
- Cannot touch issues already under appeal or revision.
Rectification Process (Online)
- Log in to Income Tax e‑filing portal
- Navigate: Services → Rectification → New Request
- Select order type and assessment year
- Choose request mode:
- Reprocess the return
- Tax credit mismatch
- Return data correction (upload corrected XML/JSON for specific fields)
- Provide details, upload docs if needed
- Submit and note reference number
- Track status; amended order is provided via e-mail/SMS
What Errors Qualify
- Arithmetic or computational mistakes
- Clerical or typographical errors
- Wrong facts (e.g. incorrect PAN, gender)
- Mistakes in TDS/TCS credits, advance tax entries
- Other errors obvious from record, requiring no debate
Summary Table
| Feature | Details |
|---|---|
| Correction scope | Orders/intimations under 143, TDS, TCS, assessments |
| Who can trigger | Taxpayer or Income Tax Authority (suo moto) |
| Time limit (officer) | Within 4 years of end of relevant FY |
| Time limit (taxpayer-app) | Authority to act within 6 months from month-end of application |
| Hearing required | Yes, if tax liability is increased or refund reduced |
| Invalid scenarios | Debatable issues, subject of appeal, new exemptions/income adjustments |
| Mode | Online through e‑filing, with ARN and tracking |
Final Takeaway
Section 154 is a quick fix tool for clear, obvious mistakes in tax orders or intimations. It’s fast—handled online, with no appeals or tribunals—so use it wisely for simple corrections. But for changes that alter income or need deeper review, file a revised ITR or go through appeal, not rectification.
