690/CBDT. - Income Tax - 690/CBDT

INSTRUCTION NO. 690/CBDT Dated : May 20, 1974 Section(s) Referred: 154 Statute: Income - Tax Act, 1961 Reference is invited to the Board's Instruction No.429 F.No.245/79/72-A PAC dated the 14th June, 1972 regarding the rectification of mistakes, in favour of the assessee, pointed out by the Internal/Revenue Audit Parties, even if the said rectification has to be carried out beyond the period specified in sub-section (7) of Section 154. 2. A query has been raised as to how the cases in which two or more mistakes are pointed out, some in favour of the assessee and some against the assessee, are to be dealt with. The problem posed is whether, ignoring mistakes against the assessee, the other mistakes in favour of the assessee can be rectified in terms of the said Instruction. 3. The Board's Instruction referred to above applies where "(a) rectification of the mistake(s) pointed out by the Audit, relief is due to the assessee on merits, apart from the question of limitation, and (b) the rectification is time-barred. 4. The spirit of the Board's instruction is that where(a) is fulfilled, the limitation should be waived. The question of waiving limitation arises only if the first conditions is fulfilled, i.e. rectification of all mistakes on merits without regard to limitation results in net relief to the assessee. In other words, when we consider whether or no relief is due to the assessee we go by merits, without taking into account the question of limitation. That being so, we have to consider all mistakes whether in favour or against the assessee. It is only when the net result is in favour of the assessee that the Board's Instruction No.429 can be invoked to waive the time limit. 5. These instructions may be brought to the notice of all the officers in your charge.