My rectification application has been sitting with the officer for more than six months. Has it lapsed?
No. The Board issued this instruction precisely because officers were taking the view that an application not decided inside the six months in s.154(8) had lapsed and needed no action. The instruction records that view, rejects it, and directs that the six-month limit be strictly followed and monitored by supervisory officers.
Decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes, Department of Revenue, Ministry of Finance. The instruction itself carries no signatory - its text runs 'the undersigned is directed to convey' - and the attribution to Rohit Garg, Deputy Secretary to the Government of India, comes from the commentary reproduction alone.) on 2016-02-15, reported as Instruction No. 01/2016 [F. No. 225/305/2015-ITA.II], dated 15 February 2016. It bears on section 154, section 154(8) of the Income Tax Act 1961, in Assessment & Scrutiny, Refunds, Interest & Condonation and Demand, Recovery & Stay matters.
It is the document to quote when a rectification is simply not being dealt with, and it is more useful than the section itself, because it answers the exact excuse the officer gives - that the application has lapsed with the time limit. It also sets up an administrative escalation: the Board has told supervisory officers to monitor adherence and says administrative action may be initiated where the time frame is not kept. It works in practice: in L S Cable and System Ltd. v. Union of India [2020] 118 taxmann.com 469 (Delhi) and again in Afilias India (P.) Ltd. v. Dy. CIT [2024] 161 taxmann.com 235 (Delhi) the petitioner relied on this instruction alongside Circular No. 14/2001, and in each case the Delhi High Court directed the officer to decide the pending rectification within a fixed period and to release the consequential refund. Nothing in it says the claim is deemed allowed, so it does not do the taxpayer's work for him.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Sub-section (8) of s.154 requires the income-tax authority, where an application for amendment is made by an assessee, deductor or collector, to pass an order within six months from the end of the month in which the application is received, by either making the amendment or refusing to allow the claim. It was brought to the Board's notice that the six months was not being observed in deciding some applications, and that field authorities 'often take a view that since no action was taken within the prescribed time-frame, the application of the taxpayer is deemed to have lapsed, thereby not requiring any action'.
The Board directed that the six-month time limit is to be strictly followed by the Assessing Officer while disposing of applications filed under s.154 by the assessee, deductor or collector; that supervisory officers should monitor adherence to the prescribed time limit; and that suitable administrative action may be initiated in cases where failure to adhere to the prescribed time frame is noticed. The contents of the instruction were to be brought to the notice of all for necessary compliance.
The instruction proceeds on the statutory language: s.154(8) obliges the authority to pass an order one way or the other within the period, so an application cannot lapse by the passage of time. The Board did not say what the consequence of a breach is for the application itself; it treated the failure as an administrative default and dealt with it by supervision and, where needed, administrative action.
The matter has been examined by the Board. In this regard, the undersigned is directed to convey that the aforesaid time-limit of six months is to be strictly followed by the Assessing Officer while disposing applications filed by the assessee/deductor/collector under section 154 of the Act. The supervisory officers should monitor the adherence of prescribed time-limit and suitable administrative action may be initiated in cases where failure to adhere to the prescribed time frame is noticed.
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Handle my notice → Ask a CA on WhatsAppNo. The Board issued this instruction precisely because officers were taking the view that an application not decided inside the six months in s.154(8) had lapsed and needed no action. The instruction records that view, rejects it, and directs that the six-month limit be strictly followed and monitored by supervisory officers. This was decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes, Department of Revenue, Ministry of Finance. The instruction itself carries no signatory - its text runs 'the undersigned is directed to convey' - and the attribution to Rohit Garg, Deputy Secretary to the Government of India, comes from the commentary reproduction alone.) and bears on section 154, section 154(8) of the Income Tax Act 1961. It is reported as Instruction No. 01/2016 [F. No. 225/305/2015-ITA.II], dated 15 February 2016. It is the document to quote when a rectification is simply not being dealt with, and it is more useful than the section itself, because it answers the exact excuse the officer gives - that the application has lapsed with the time limit. It also sets up an administrative escalation: the Board has told supervisory officers to monitor adherence and says administrative action may be initiated where the time frame is not kept. It works in practice: in L S Cable and System Ltd. v. Union of India [2020] 118 taxmann.com 469 (Delhi) and again in Afilias India (P.) Ltd. v. Dy. CIT [2024] 161 taxmann.com 235 (Delhi) the petitioner relied on this instruction alongside Circular No. 14/2001, and in each case the Delhi High Court directed the officer to decide the pending rectification within a fixed period and to release the consequential refund. Nothing in it says the claim is deemed allowed, so it does not do the taxpayer's work for him. If it applies to you, the first step is this: Put the follow-up in writing, quote the instruction by number and date, and record the date the application was filed and the date the six months expired.
Sub-section (8) of s.154 requires the income-tax authority, where an application for amendment is made by an assessee, deductor or collector, to pass an order within six months from the end of the month in which the application is received, by either making the amendment or refusing to allow the claim. It was brought to the Board's notice that the six months was not being observed in deciding some applications, and that field authorities 'often take a view that since no action was taken within the prescribed time-frame, the application of the taxpayer is deemed to have lapsed, thereby not requiring any action'. The matter was decided on 2016-02-15 by the CBDT Circulars & Instructions (Central Board of Direct Taxes, Department of Revenue, Ministry of Finance. The instruction itself carries no signatory - its text runs 'the undersigned is directed to convey' - and the attribution to Rohit Garg, Deputy Secretary to the Government of India, comes from the commentary reproduction alone.). On those facts the CBDT Circulars & Instructions held as follows. The Board directed that the six-month time limit is to be strictly followed by the Assessing Officer while disposing of applications filed under s.154 by the assessee, deductor or collector; that supervisory officers should monitor adherence to the prescribed time limit; and that suitable administrative action may be initiated in cases where failure to adhere to the prescribed time frame is noticed. The contents of the instruction were to be brought to the notice of all for necessary compliance.
The instruction proceeds on the statutory language: s.154(8) obliges the authority to pass an order one way or the other within the period, so an application cannot lapse by the passage of time. The Board did not say what the consequence of a breach is for the application itself; it treated the failure as an administrative default and dealt with it by supervision and, where needed, administrative action. In the words reproduced by the source cited on this page: "The matter has been examined by the Board. In this regard, the undersigned is directed to convey that the aforesaid time-limit of six months is to be strictly followed by the Assessing Officer while disposing applications filed by the assessee/deductor/collector under section 154 of the Act. The supervisory officers should monitor the adherence of prescribed time-limit and suitable administrative action may be initiated in cases where failure to adhere to the prescribed time frame is noticed."
It was decided by the CBDT Circulars & Instructions on 2016-02-15 and is reported as Instruction No. 01/2016 [F. No. 225/305/2015-ITA.II], dated 15 February 2016. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 154, section 154(8), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Board directed that the six-month time limit is to be strictly followed by the Assessing Officer while disposing of applications filed under s.154 by the assessee, deductor or collector; that supervisory officers should monitor adherence to the prescribed time limit; and that suitable administrative action may be initiated in cases where failure to adhere to the prescribed time frame is noticed. The contents of the instruction were to be brought to the notice of all for necessary compliance. It arises in Assessment & Scrutiny, Refunds, Interest & Condonation and Demand, Recovery & Stay matters, on section 154, section 154(8) of the Income Tax Act 1961, and was decided by Central Board of Direct Taxes, Department of Revenue, Ministry of Finance. The instruction itself carries no signatory - its text runs 'the undersigned is directed to convey' - and the attribution to Rohit Garg, Deputy Secretary to the Government of India, comes from the commentary reproduction alone.. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Copy the supervisory officer, since the instruction places the monitoring duty on him. Ask for an order either amending the order or refusing the claim - only an order gives you the appeal under s.246A; silence gives you nothing to appeal against. If a writ becomes necessary, plead the instruction with Circular No. 14/2001 dated 9 November 2001, as the petitioners did in L S Cable and System Ltd. (Delhi, 13 August 2020) and Afilias India (P.) Ltd. (Delhi, 14 December 2023), in both of which the Court fixed a time for disposal and for the refund. Keep the four-year limit in s.154(7) in view while the application sits, and if the demand is being pressed meanwhile, deal with recovery separately under s.220(6).
Still good law. Two Delhi High Court decisions take the instruction up by name. In L S Cable and System Ltd. v. Union of India [2020] 118 taxmann.com 469 (Delhi), Manmohan and Sanjeev Narula, JJ., W.P.(C) No. 5154 of 2020, assessment year 2017-18, decided 13 August 2020, the Court recorded at paragraph 4 the petitioner's reliance on Circular No. 14/2001 dated 9 November 2001 and on Instruction No. 01/2016, quoting its direction that the six-month time limit is to be strictly followed while disposing of applications under s.154; the Revenue then stated that the rectification application would be disposed of within six weeks and the refund processed within three weeks after that, and at paragraph 8 the Court directed exactly that, by a reasoned order and in accordance with law. In Afilias India (P.) Ltd. v. Dy. CIT [2024] 161 taxmann.com 235 (Delhi), Manmohan, Actg. CJ., and Ms. Mini Pushkarna, J., W.P.(C) Nos. 16074 and 16080 of 2023, assessment years 2017-18 and 2018-19, decided 14 December 2023, paragraph 3 records the same reliance in the same words, and at paragraph 5 the Court directed the officer to decide the rectification applications by a speaking order within eight weeks and to release the consequential refunds with up-to-date interest within a further eight weeks. Be precise about what that is. In neither case did the Court construe the instruction or hold it binding: L S Cable proceeded on the Revenue's own undertaking and Afilias on the limited relief sought. This is the instruction being cited and given effect to, not interpreted. Supersession: nothing withdrawing, superseding or replacing it was found; it carries no such annotation in a research database that does annotate superseded instruments, and a search on its file number returns only this instruction and its companion No. 02/2016 of the same date, which supplements it rather than displaces it. On currency, the six-month rule is carried into the Income-tax Act 2025 as s.287(9): "Subject to sub-section (8), an income-tax authority referred to in sub-section (1), shall pass an order for making the amendment or refusing to allow the claim within six months from the end of the month in which the application for amendment under this section is received by it from the assessee or the deductor or the collector." That finding was checked against a published source, which is linked on this page, on 2026-08-24. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The instruction has now been read in a primary rendering as well as on TaxGuru. Two wording points matter for a library that quotes it. The primary text reads 'strictly followed by the Assessing Officer', while the Delhi High Court, quoting it in both L S Cable (paragraph 4) and Afilias (paragraph 3), has it as 'by Assessing Officer' without the article; both readings are in circulation and neither should be presented as the only text. The stored quotation, which stopped short of the monitoring clause and abbreviated 'administrative', is now given in full from paragraph 2. The instruction carries no signatory in its own text, which runs 'the undersigned is directed to convey'; the attribution to Rohit Garg, Deputy Secretary, comes from the commentary reproduction and is recorded as such rather than stated flatly. The instruction does not create a deeming provision - it does not say the claim is allowed if the six months pass, and nothing read holds that it is. What a taxpayer gets from it is an administrative obligation and a document to cite in a writ petition or a grievance, which is exactly how the Delhi High Court has been asked to use it. The section index has been trimmed to ss.154 and 154(8): the instruction's own text does not mention s.246A, and the references to it in the prose here are the editor's, being the Act's appeal provision. Its file number, F. No. 225/305/2015-ITA.II, is shared with the companion Instruction No. 02/2016 of the same date. It does not say what happens to the application if the six months pass, and it gives the taxpayer no remedy in terms. Whether an application filed inside four years but decided after the four years in s.154(7) can still be given effect is not addressed. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Board directed that the six-month time limit is to be strictly followed by the Assessing Officer while disposing of applications filed under s.154 by the assessee, deductor or collector; that supervisory officers should monitor adherence to the prescribed time limit; and that suitable administrative action may be initiated in cases where failure to adhere to the prescribed time frame is noticed. The contents of the instruction were to be brought to the notice of all for necessary compliance.
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