Board's authorisation for taking action under section 154 beyond time limit specified under section 154(7) in cases of protective assessments requiring to be cancelled - Order under section 119(2)(b) - Income Tax - 71/1971

Circular 71 Dated 20/12/1971 Board's authorisation for taking action under section 154 beyond time limit specified under section 154(7) in cases of protective assessments requiring to be cancelled - Order under section 119(2)(b) A copy of the order dated 20-12-1971 passed by the Board on the subject is enclosed for information and guidance. Circular : No. 71 [F.No. 246/25/71-A PAC], dated 20-12-1971. ANNEX - ORDER REFERRED TO IN CLARIFICATION 1. Where the same income was assessed, as a protective measure, in the hands or more than one assessee or as the income of more than one assessment year, and one or more of these protective assessments needs to be cancelled as a result of some of the relevant assessments having become final and conclusive, it has been the practice of the Income-tax Department to cancel the redundant assessments under section 154, treating these as involving mistakes apparent from the records. This is being done by the Income-tax Officers either suo motu or on applications made by assessees. Sometimes, it is not possible to take action under section 154 in such cases because of the operation of the time limit laid down in sub-section (7) of section 154. Since the operation of this time limit causes genuine hardship to the affected assessees, the Central Board of Direct Taxes, in exercise of the powers vested in them under clause (b) of sub-section (2) of section 119, hereby authorises the Income-tax Officer to take action under section 154, or to admit or dispose of on merits applications under section 154 filed by assessees seeking relief, for cancelling such protective assessments as have become redundant by waiving, if necessary, the time limit fixed under sub-section (7) of section 154. 2. Every case of the relaxation of the time limit on the authority of this order shall be reported by the Income-tax Officer to the Inspecting Assistant Commissioner, in whose jurisdiction he is functioning within one month of the passing of such order.