Rectification beyond scope cannot revisit a settled factual issue or deny exemption without hearing the assessee.

Rectification cannot be used to reopen a concluded position on a disputed factual issue or to review an earlier acceptance under the income-tax law. The assessee's exemption under section 11 had originally been allowed after the return was filed within the extended CBDT timeline and Form 10B filing difficulties were explained. A later rectification denying the exemption merely revisited the same factual dispute and was beyond the scope of section 154, especially as no opportunity of hearing was granted. The rectification order was therefore invalid and the original intimation allowing the exemption was restored.

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Issues: Whether the rectification under section 154 of the Income-tax Act, 1961, denying exemption under section 11 on the ground of alleged belated filing of Form 10B was valid.

Analysis: The return of income had been filed within the extended time granted by CBDT Circular No. 01/2022, and the assessee had taken steps to file Form 10B on the same date. The earlier processing under section 143(1) had accepted the assessee's explanation regarding technical difficulties on the e-filing portal and allowed the exemption. The subsequent rectification merely revisited the same disputed factual issue and effectively reviewed the earlier acceptance, which is beyond the scope of section 154. The rectification was also made without granting an opportunity of hearing as required under section 154(3).

Conclusion: The rectification order was invalid and the denial of exemption under section 11 could not be sustained.

Final Conclusion: The assessee was entitled to restoration of the original intimation allowing the exemption, and the appeal succeeded.

Ratio Decidendi: Section 154 cannot be used to reopen or review a concluded position on a disputed factual issue, especially where the assessee was not given the mandatory opportunity of being heard.

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