CBDT Directive - Rectification u/s 154 -Procedure of Receipt and Disposal

Procedure of Receipt and Disposal of Rectification Application filled u/s 154

This instruction is issued by CBDT on directive issued from Delhi High court in “Court on its Own Motion vs. UOI 352 ITR 273.

The CBDT has issued Instruction No. 03/2013 dated 05.07.2013 on the procedure to be followed on the receipt and disposal of rectification applications filed u/s 154 of the Act. On this CBDT has set out a detailed procedure on where applications should be received, the maintenance of registers and their disposal. In this directive CBDT states the procedure of receiving of rectification application u/154. For those areas where Ayakar seva kendara are operating there they have to issued computer generated receipt on receiving application in where no seva Kendra there the department note down application and allowed a number immediately on receipt.

In case of E-filling even rectification application has to be moved through online channel. Rectification application to be disposed of within 6 months. Income tax department has to maintain a online rectification register and it should be updated on daily basis. It means it should be updated on the receiving of application.

INSTRUCTION NO.3/2013[F.NO.225/76/2013/ITA.II], DATED 5-7-2013

 Hon’ble Delhi High Court vide Judgment in case of Court On its Own Motion v. UOI and Ors. in W.P. (C) 2659/2012 dated 14.03.2013 has issued several Mandamuses for necessary action by income-tax Department one of which is regarding maintenance of “Rectification Register” in which details like receipt of applications under section 154 of the IT Act, their processing and disposal are to be maintained. (Reference: Para 16 to 18 of the order).

 2. In view of the said order it has been decided by the Board that henceforth all applications received under section 154 of the I.T. Act by the concerned jurisdictional authorities shall be dealt with in the following manner-

A. Receipt of applications under section 154 of the Income-tax Act, 1961:

A.1. Offices where Aayakar Seva Kendra is Centeralized Dak receipt Center

(i) All offices where Aayakar Seva Kendra (‘ASK’) is functional, it would be ensured that that all applications received under section 154 are duly entered into the system by the ASK and a system generated ASK acknowledgement number shall be given to the taxpayer.

 (ii) The acknowledgement number of application received u/s 154 provided to the taxpayer at ASK receipt counter shall be transmitted online to the Assessing Officer while paper application shall be physically forwarded to the Assessing Officer.

(iii) At places where Aayakar Seva Kendra is non-functional but where ASK-Sofware is used for purposes of receipt of Dak, the procedure outlined for Aavakar Seva Kendras mentioned above would be adopted in respect of applications u/s 154 received by the concerned authority.

A.2. Offices where Dak is received by the jurisdictional Assessing Officer

 Offices where neither Aayakar Seva Kendra is functional nor ASK Software is used for receipt of dak, the applications u/s 154 should be received, noted down in diary and acknowledgment number should be given to the assessee by the receiving jurisdictional Assessing Officer immediately at the time of filing the application.

B. Maintenance of “Register of Rectifications under section 154″ online

 B.1. To facilitate action u/s 154 in a time bound and transparent manner, all Assessing Officers should enter rectification applications in the “online Rectification Register” which has been made available in ITD Applications. The procedure to maintain this register online has already been intimated to the field formations vide AST Instruction No. 112 dated 29.11.2012 issued by the Directorate of Income-tax (Systems).

 B.2. Rectification applications have to be compulsorily uploaded in “Online Rectification Register” by the Assessing Officer on the day application is received by him either through Aayakar Seva Kendra/ASK Software or in his own office. The acknowledgement number provided to the taxpayer at the time of receiving application u/s 154 must invariably be entered in “Online Rectification Register” in appropriate column.

C. Disposal of applications under section 154 of the Income-tax Act, 1961:

 C.1. As per provisions of Section 154 of the I.T, Act, 196l, each application under that Section has to be disposed of by passing appropriate order within 6 months from the end of the month in which application is received. However, under Citizens Charter of 2010, the service delivery standard in respect of deciding rectification application has been fixed as 2 months. The concerned authorities should therefore, abide by this standard and ensure that rectification applications are decided as far as possible within a period of two months from the end of the month in which application is received.

 C.2. Every Rectification application has to be processed through ITD applications only.

 C.3. In cases where applications were received through Aayakar Seva Kendra/ASK Software, Assessing Officer should also flag/mark the disposal of rectification application in ASK Software so that its disposed status could be tracked down.

C.4. The order under section 154 of income-tax Act muse fulfill all the legal requirements, should be a speaking order and has to be invariably communicated co the taxpayer immediately after its disposal.

3. In respect of e-filed returns, the rectification applications are also filed online. CPC would be required to immediately identify whether action can be taken at its own end or it has to be transferred to the Assessing Officer for necessary action. If CPC is required to take action, it would do so within the time-frame prescribed. On the other hand, if the Assessing Officer is required to dispose it off, he would enter the same in the online rectification register, process it on AST and shall again make necessary entries therein once the same is disposed off. The prescribed time limit would strictly be adhered to in this case also.

4. All CCsIT/DGsIT are requested to ensure that the above procedure is strictly followed in their charge with immediate effect and the maintenance and updating of online rectification register is monitored by the concerned supervisory officers in their respective charges.