Mistake in circular about pension Scheme need immediate rectification to avoid confusions and litigation.

[C.A. DEV KUMAR KOTHARI]

Circular of CBDT:

Circulars of CBDT are binding on Income-tax authorities. Circular should be in accordance with the provision of the Act. A circular which is contrary to the provisions of the act is not valid to the extent it is not in accordance with the provisions.

Circular on Section 80CCD vide file no. F.No. 275/192/2009-IT(B)

Dated the 9th February, 2010.

In this circular the Board has issued clarifications about deduction u/s 80CCD read with other provisions. It seems that there is some inconsistencies in circular itself and the paragraph 4 of the circular contains a mistake which is contrary to paragraph 2 of circular and sub-section (2) of section 80CCD.

Mistake can cause litigation and hardship on assessee:

The mistake is in fact in nature of typographical mistake or inadvertent mistake. However, wordings used are such that the revenue authorities are bound by the same. Therefore, it appears that unless the Circular is rectified, the mistake may cause un-necessary disallowances and assessee to prefer appeals and to indulge in litigation.

The circular is reproduced below with highlights of relevant portions: