How to manage a notice under Section 154?

Clear errors that do not need more proof than appears in an income tax return form require an “amendment” by the income tax authority. Such mistakes are also known as mistakes apparent from record.

Given below are some examples of “mistakes” under section 154:

• Arithmetical or clerical errors.
• Misinterpretation of an unambiguous section of the IT Act.
• Using a provision not applicable to your situation.
• Failure to follow a judicial order in respect of income tax.
• Mistaken application of a provision in the Act.
• Failure to look up a compulsory clause not open to taxpayer discretion.

Your Assessing officer is authorised to:

1. Amend an order made under the Act
2. Amend any intimation or deemed intimation as per section 143(1). Refer to the next article to find out what an intimation under 143(1) is.

Request for Rectification under the IT Act:

A request for rectification may be filed quoting Section 154 of the Income Tax Act when there is a mistake apparent from the record.

You can e-file your Rectification if you are already registered on the income tax department website, this being the easiest way to proceed with your response to this tax notice.

Here is how you can perform an online rectification:

1. Go to the official income tax login portal and sign in with your PAN, registration password and date of birth. Navigate to the e-file tab and click Rectification.
   
   
   
2. Choose Income Tax Return from the drop-down and the relevant Assessment year. Put in the last Communication Reference Number (as mentioned in the CPC Order). Click on Validate.

3. Choose the “Rectification Request Type”.
   
   
   
4. If you choose, “Taxpayer is correcting data for Tax Credit mismatch only”, 4 check boxes are shown. Tick the checkbox against which data needs to be corrected.
   Usually, these fields are pre-filled from the ITR form originally submitted. A taxpayer can put 10 entries for each option chosen.
   You don’t need to upload any ITR here.
   Put in the correct tax payment particulars where required.
   
   
   
5. If you choose, “Taxpayer is correcting Data in Rectification”, you must give a reason for seeking rectification.
   The reasons you are permitted to give are shown below. You can choose up to 4 such reasons.
   
   
   
6. Now you will be asked to quote the Schedule change which describes your rectification. If you qualify for an audit then you upload supporting documents also.
   
   
   
7. If you choose, “No further data required. Reprocess the case”, you will need to tick from
   1. Mismatch of tax credit
   2. Gender mismatch

• Tax/ interest computation mismatch
  
  
  

8. You can click on Form 26AS details or Tax credit mismatch details to see figures received by the tax authority.
9. To complete the process, click on Submit and confirm consistency with Form 26AS. Finally note down the transaction ID and phone helpline number given and you are done.