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Case law › Circulars › 1971 › Circular No. 68
CBDT circular 17 November 1971

Circular No. 68

Section 154 l Rectification of Mistakes

What this is

Circular No. 68 was issued by the Central Board of Direct Taxes on 17 November 1971. Its subject is Section 154 l Rectification of Mistakes.

What it does

Accepts that a mistake arising from a later Supreme Court interpretation of the law is a mistake apparent from the record, so rectification under section 154 of the 1961 Act, or section 35 of the 1922 Act, is in order. Where an assessee applies under section 154 pointing out that a completed assessment is mistaken in the light of a later Supreme Court decision stating the correct legal position, the application is to be acted upon provided it is filed within time and is otherwise in order. Where such an application has already been rejected and a fresh one is filed within the statutory time limit, it is to be treated on the same footing as a pending or later application. The Board also asks that appeals or references pending on the point be withdrawn.

Why it was issued

The Board was advised that a subsequent Supreme Court interpretation gives rise to a mistake apparent from the record, and it settled departmental practice accordingly.

Who it reaches

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.
Under the 1961 ActNow
s.35s.45, s.66
s.154s.287

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

SECTION 154 l RECTIFICATION OF MISTAKES
899. Mistakes apparent from records - Whether can be treated as such on the basis of subsequent decision of Supreme Court
1. The Board are advised that a mistake arising as a result of a subsequent interpretation of law by the Supreme Court would constitute "a mistake apparent from the records" and rectificato­ry action under section 35/154 of the 1922 Act/the 1961 Act would be in order. It has, therefore, been decided that where an asses­see moves an application under section 154 pointing out that in the light of a later decision of the Supreme Court pronouncing the correct legal position, a mistake has occurred in any of the completed assessments in his case, the application shall be acted upon, provided the same has been filed within time and is other­wise in order. Where any such applications have already been rejected and the assessee files fresh applications within the statutory time limit, the same may also be treated on par with the applications which may either be pending or received after the issue of this circular.
2. The Board desire that any appeals or references pending on the point at issue may please be withdrawn.
Circular : No. 68 [F.No. 245/17/71-A&PAC], dated 17-11-1971.

What to watch

Where you meet it

On a section 154 application founded on a Supreme Court judgment delivered after the assessment was completed.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

← Circular No. 69  ·  Circular No. 67 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.