Regarding suo moto initiation of rectificatory action. - Income Tax - 1466/CBDT

INSTRUCTION NO. 1466/CBDT Dated: May 29, 1982 Attention is, invited to the following instruction/circular, laying down that a mistake arising as a result of subsequent interpretation of law by the Supreme Court would constitute a mistake apparent from the records and, as such, rectificatory action u/s 34 of the Gift Tax Act and 154 of the Income-tax Act, 1961 respectively would be in order:- (i) Instruction No. 274 dated 6-3-1971 issued from F.No. 329/5/71-GT. (2) Circular No. 68 dated 17-11-1971 issued from F.No. 245/17/71-A PAC. 2. In both the above instruction/circular, it has been mentioned that such rectificatory action should be taken, if the application has been made by the assessee and has been filed within time. 3. The question for consideration is whether rectificatory action can be taken suo motu also by the assessing officer when such mistake comes to his notice. The point has assumed importance in view of the Supreme Court decision in the case of Commissioner of Wealth-tax Amritsar vs. Suresh Seth (129 ITR 328), which supersedes Board's instruction No. 447 dated 19-8-1972 issued from F.No. 324/12/72/-WT. 4. The Board herewith clarify that if the mistake is apparent from the record, the rectification can be made as much by an application made by the assessee pointing out the mistake as well as by the assessing officer suo motu, when such mistake comes to his notice. 5. The Board desire that the enhanced penalties levied u/s 18(1)(a) of the Wealth-Tax Act in view of instruction NO. 477 dated 19-8-1972 should be rectified u/s 35 of the Wealth-Tax Act and recalculated according to the decision of the Supreme Court in Suresh Seth's case, immediately so that the infructuous demand could be liquidated by 31-3-1982. 6. Necessary instructions in this regard may be issued to all the assessing officers.