Section 250 of the Income Tax Act, 1961 deals with the provisions for rectification of mistakes apparent from records. The section provides taxpayers with a remedy to rectify any errors or mistakes in their income tax returns or orders passed by tax authorities. Let’s take a closer look at the various aspects of section 250 of the Income Tax Act, 1961.
What is Section 250 of the Income Tax Act, 1961?
Section 250 of the Income Tax Act, 1961 is a provision that empowers taxpayers to apply for rectification of mistakes apparent from records. Mistakes may arise due to various reasons, such as incorrect computation of income, incorrect tax liability determination, and incorrect claim of deductions. The section provides taxpayers with an opportunity to rectify these mistakes before it’s too late.
Who can apply for rectification under Section 250?
Section 250 is applicable to taxpayers who have filed their income tax returns and received orders from the tax authorities. The orders may include orders for assessment, penalty, interest, refund, or any other order passed by the tax authorities. Any taxpayer who has received such orders can apply for rectification under Section 250.
What is the time limit for filing an application for rectification under Section 250?
The time limit for filing an application for rectification under Section 250 is four years from the end of the financial year in which the order was passed. For example, if an order was passed in the financial year 2019-20, the taxpayer can file an application for rectification till March 31, 2024.
What are the types of mistakes that can be rectified under Section 250?
Section 250 allows rectification of mistakes that are apparent from records. The term ‘apparent from records’ refers to mistakes that can be detected by examining the records available with the tax authorities. The following are some of the common mistakes that can be rectified under Section 250:
- Incorrect computation of income
- Incorrect tax liability determination
- Incorrect claim of deductions
- Incorrect treatment of carry forward losses
- Incorrect application of tax credit
- Incorrect tax rate application
How to apply for rectification under Section 250?
Taxpayers can apply for rectification under Section 250 by filing an application with the concerned tax authorities. The application should be filed in the prescribed form, which may vary depending on the type of order for which rectification is sought. The application should also be supported by necessary documents to substantiate the mistake or error.
What is the time limit for passing an order on the application for rectification?
The tax authorities are required to pass an order on the application for rectification within six months from the end of the month in which the application is received. If the authorities fail to pass an order within the stipulated time, the application is deemed to have been accepted.
In addition to the above points, it’s important to note that Section 250 is not applicable for rectification of mistakes that require a detailed examination of facts or interpretation of laws. If the mistake requires a detailed examination or interpretation, the taxpayer may have to resort to other legal remedies such as filing an appeal or revision application.
Another important point to keep in mind is that the rectification under Section 250 can only be applied for once. If the rectification application is rejected, the taxpayer cannot file another application for the same mistake.
Taxpayers should also ensure that they have paid the tax liability, including interest and penalty, before filing an application for rectification under Section 250. Failure to pay the tax liability may result in the rejection of the rectification application.
It’s also worth mentioning that the rectification under Section 250 is not applicable for mistakes in the return of income that have already been assessed or for which an appeal or revision application is pending. In such cases, the taxpayer may have to wait for the outcome of the appeal or revision application before applying for rectification.
Conclusion
In conclusion, Section 250 provides taxpayers with a valuable opportunity to rectify any mistakes or errors in their income tax returns or orders passed by the tax authorities. It’s advisable for taxpayers to be aware of the various aspects of this provision and seek professional guidance to ensure that their rectification application is filed correctly and in a timely manner.
Read more useful content:
- section 145 of income tax act
- section 10e of income tax act
- section 9 of the income tax act
- section 94b of income tax act
- section 206aa of income tax act
Frequently Asked Questions (FAQs)
What is the meaning of ‘mistakes apparent from records’ under Section 250 of the Income Tax Act, 1961?
Answer: The term ‘mistakes apparent from records’ refers to mistakes that can be detected by examining the records available with the tax authorities.
Who can apply for rectification under Section 250?
Answer: Any taxpayer who has received orders from the tax authorities, including orders for assessment, penalty, interest, refund, or any other order, can apply for rectification under Section 250.
What is the time limit for filing an application for rectification under Section 250?
Answer: The time limit for filing an application for rectification under Section 250 is four years from the end of the financial year in which the order was passed.
Can rectification be applied for more than once under Section 250?
Answer: No, rectification can only be applied for once under Section 250.
What types of mistakes can be rectified under Section 250?
Answer: Mistakes such as incorrect computation of income, incorrect tax liability determination, incorrect claim of deductions, incorrect treatment of carry forward losses, incorrect application of tax credit, and incorrect tax rate application can be rectified under Section 250.
What is the time limit for passing an order on the application for rectification?
Answer: The tax authorities are required to pass an order on the application for rectification within six months from the end of the month in which the application is received.
Can rectification be applied for mistakes in returns that have already been assessed?
Answer: No, rectification under Section 250 is not applicable for mistakes in returns that have already been assessed.
Is it necessary to pay the tax liability before applying for rectification under Section 250?
Answer: Yes, it is necessary to pay the tax liability, including interest and penalty, before applying for rectification under Section 250.
Can rectification be applied for mistakes for which an appeal or revision application is pending?
Answer: No, rectification under Section 250 is not applicable for mistakes for which an appeal or revision application is pending.
What is the importance of seeking professional guidance while applying for rectification under Section 250?
Answer: Seeking professional guidance can ensure that the rectification application is filed correctly and in a timely manner, reducing the chances of rejection and avoiding potential disputes with the tax authorities.
