“Section 154(2)(b)”
The decision most relied on for Section 154(2)(b) is 1. AIR 1951 SC 467: HARLA v. THE STATE OF RAJASTHAN. 2 (2 SCC 453), cited in 222 judgments on BharatTax.
Leading authorities on Section 154(2)(b)
When an appeal or revision is filed against an order passed by a subordinate forum, and a superior forum modifies, reverses, or affirms that decision, the order of the subordinate forum merges into the superior forum's decision, which then becomes the sole operative and enforceable order.
The requirement to file a certificate or form (e.g., Form 10CCB, 10-IC) along with the return of income for claiming a deduction (e.g., under sections 80-IB, 115BAA) is directory regarding its timing. Such a deduction is allowable if the requisite form is filed before the final order of assessment, as procedural requirements should not override substantive benefits.
Rectification under Section 154 is permissible based on a subsequent judgment of the Jurisdictional High Court or the Supreme Court. Such a judgment clarifies the law as it always stood, thereby revealing a mistake apparent from the record.
The revenue must prove that an assessee received extra consideration beyond the declared value; a Departmental Valuation Officer's (DVO) report alone is insufficient to establish such receipt.
Filing an audit report, such as Form 10B under Section 12A(1)(b), is a directory procedural requirement for charitable trusts, not mandatory. If the report is not filed with the return, the Assessing Officer must provide an opportunity to rectify the defect before completing the assessment.
Corporate club membership fees paid by an assessee-company for a limited period, when intended for running the business and producing benefits for the company, are deductible as a business expense and not considered personal expenses.
The requirement to file Form 67 by the due date for claiming foreign tax credit is directory, not mandatory, if filed before the completion of assessment proceedings.
An assessee trust substantially satisfying conditions for exemption under section 11 should not be denied exemption merely due to delay in filing the audit report in Form 10B, as the legislature has conferred wide discretionary powers to condone such delay.
