Section 154 of the Income Tax Act

Income-tax Act, 2025: s.287

Section 154 of the Income-tax Act, 1961 corresponds to section 287 (Rectification of mistake) of the Income-tax Act, 2025.

Read section 287 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 154 is Fatehraj Singhvi v. UOI (73 Taxmann.com 252), cited in 1,778 of the 8,676 judgments on BharatTax that turn on this section.

Leading authorities on Section 154

Fatehraj Singhvi v. UOI
73 Taxmann.com 252 · 2016 · High Court
1,778
citing judgments

Late fees under section 234E are not applicable for periods prior to June 1, 2015, as the amendment to section 200A inserting clause (c) was effective from that date.

Kourani v. Union OF India
83 Taxmann.com 137 · 2017 · High Court
1,708
citing judgments

The fee under Section 234E for late filing of TDS/TCS statements cannot be levied retrospectively by processing an intimation under Section 200A for defaults occurring before the amendment allowing such processing.

CIT v. AIMIL Ltd.
321 ITR 508 · 2010 · High Court
1,629
citing judgments

Employee contributions to PF and ESIC, deposited beyond the due date under the respective Acts but within the due date for filing the income tax return under Section 139(1), are allowable deductions under Section 36(1)(va). Such disallowance cannot be made during processing under Section 143(1).

Fateh Raj Singhvi & Ors. v. UOI
289 CTR 602 · 2016 · High Court
844
citing judgments

A fee under Section 234E cannot be levied or adjusted in an intimation under Section 200A for TDS statements pertaining to periods prior to June 1, 2015, as the enabling amendment to Section 200A(1)(c) came into effect only from that date.

ACIT v. Vireet Investment Pvt. Ltd.
82 Taxmann.com 415 · 2017 · High Court
789
citing judgments

Disallowance computed under Section 14A, read with Rule 8D, cannot be added to book profits under Section 115JB for Minimum Alternate Tax (MAT) purposes. Additionally, for Section 14A disallowance, only investments that yielded exempt income during the year are considered for calculating their average value.

Rashmikant Kundalia v. Union of India
54 Taxmann.com 200 · 2015 · High Court
702
citing judgments

Section 234E, levying late fees for delayed filing of TDS statements under section 200(3), is constitutionally valid and constitutes a compensatory fee, not a punitive penalty. Before treating any person as an assessee-in-default, an opportunity of being heard must be provided.

Godrej & Boyce Manufacturing Company Ltd. v. DCIT
394 ITR 449 · 2017 · Supreme Court
683
citing judgments

Expenditure can only be disallowed under Section 14A if the income is exempt and not part of the total income. The Assessing Officer must first record dissatisfaction with the assessee's accounts or computation before proceeding to make a disallowance under Section 14A or applying Rule 8D.

Olari Little Flower Kuries (P.) Ltd. v. UOI
440 ITR 26 · 2022 · High Court
614
citing judgments

The fee under Section 234E of the Income-tax Act cannot be levied for defaults in filing TDS statements committed prior to June 1, 2015, as the provision for its levy became effective only from that date.

CIT v. Manu Engg
122 ITR 306 · 1980 · High Court
505
citing judgments

When levying a penalty under Section 271(1)(c), the Assessing Officer must clearly specify whether it is for concealment of income or furnishing inaccurate particulars. An ambiguous notice or order using "and/or" for these limbs, or a standard proforma without striking irrelevant clauses, indicates non-application of mind and renders the penalty unsustainable.

ACIT v. Saurashtra Kutch Stock Exchange Ltd.
305 ITR 227 · 2008 · Supreme Court
470
citing judgments

Non-consideration of a decision by a jurisdictional High Court or the Supreme Court constitutes a mistake apparent from the record. However, non-consideration of a non-jurisdictional High Court decision does not typically amount to such a mistake.

Judgments on Section 154

Anurag Dikshit, C/O Ernst and Young LLP vs. Centralised Processing Centre of Income Tax Department, Bangalore

In the result, the appeal of the assessee is allowed

ITA 3888/MUM/2023[AY 2021-22]Status: DisposedITAT Mumbai15 Mar 2024

Bench: Shri Amarjit Singh & Ms. Kavitha Rajagopalanurag Dikshit, Vs. The Income Tax Officer C/O Ernst & Young Llp (It)2(1)(1), Air India 14Th Floor, The Ruby, Building, Nariman Point, Dadar West, Maharashtra Mumbai - 400021 400028 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aeepd3232M Appellant .. Respondent Appellant By : Nikhil Tiwari & Bhumik Vasa Respondent By : Manoj Kumar Sinha Date Of Hearing 05.03.2024 Date Of Pronouncement 15.03.2024 आदेश / O R D E R Per Amarjit Singh (Am): This Appeal Filed By The Assessee Is Directed Against The Order Passed By The Ld. Cit(A)-56, Dated 21.09.2023 For A.Y. 2021-22. The Assessee Has Raised The Following Grounds Before Us: “1. The Learned Cit(A), On The Facts & Circumstances Of The Case & In Law, Erred In Not Assessing The Correct Income Of The Appellant By Holding That The Learned Ao Had No Power To Reduce The Income Offered By The Appellant. 2. The Learned Cit(A), On The Facts & Circumstances Of The Case & In Law, Erred In Not Reducing The Corresponding Rent Income Of Inr 32,54, 155 From The Returned Income Of Ay: 2021-22, While Disallowing The Corresponding Tds Credit Of Inr 13,77,757 Claimed In The Return Of Income. The Appellant Craves Leave To Add, Alter, Vary, Omit, Substitute Or Amend Any Or All Of The Above Grounds Of Appeal, At Any Time Before Or At, The Time Of The Appeal, So As To Enable The Hon'Ble Income-Tax Appellate Tribunal To Decide This Appeal According To Law.”

For Appellant: Nikhil Tiwari &For Respondent: Manoj Kumar Sinha
Section 154

Ashok Ganeshlal Mundra, Mumbai vs. ITO 3(1)(1), Mumbai

In the result, the appeal of the assessee is partly allowed

ITA 3866/MUM/2023[2018-19]Status: DisposedITAT Mumbai15 Mar 2024AY 2018-19

Bench: Shri Amarjit Singh & Ms. Kavitha Rajagopal, Ashok Ganeshlal Mundra Vs. Asst. Dir. Of I. Tax Cpc 601, A Wing, Hansa C.H.S (Jao: Ward Mum-W - Ltd. Behind Rameshwar 331(1), Ito, Ward 3(1)(1) Mandir, Jogeshwari (East) Aayakar Bhavan, M.K. Mumbai – 400 060 Road, Mumbai- 400 020 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Abbpm0548H Appellant .. Respondent Appellant By : Ajay Singh & Akshay Pawar Respondent By : Manoj Kumar Sinha Date Of Hearing 05.03.2024 Date Of Pronouncement 15.03.2024 आदेश / O R D E R Per Amarjit Singh (Am): This Appeal Filed By The Assessee Is Directed Against The Order Passed By The Ld. Cit(A) Nfac, Dated 22.09.2023 For A.Y. 2018-19. The Assessee Has Raised The Following Grounds Before Us: “I. Denial Of Exemption Of Rs.47,18,400/- Claimed U/S 54Ec Of The Act, In Respect Of Investment In Capital Gains Bonds: 1. On The Facts & In The Circumstances Of The Case & In Law, The Id. C.I.T. (Appeals) Nfac, Erred In Upholding The Order Dt 29-01-2020 Passed U/S 154 By Adit, Cpc Denying The Relief For Exemption Of Rs.47,13,400 U/S 54Ec For Investment Of Rs. 50 Lakhs In Capital Gains Rec Bonds. 2. The Id. Cit. (Appeals) Failed To Appreciate & Consider That The Exemption Was Claimed U/S 54 Ec Of The Act, However The Same Was Not Reflected In Itr-3 Of Cpa Due To Technical Snag Which Is To Be Resolved By Dit (Systems). 3. Without Prejudice The Appellate Authority Ought To Have Considered The Claim On Its Own Merits, When Details Of Investment Made In Rec Bonds Were On Record Ii. Set-Off Of Short Term Capital Loss Against Long Term Capital Gains:

For Appellant: Ajay Singh &For Respondent: Manoj Kumar Sinha
Section 115BSection 154Section 54Section 54ESection 80T