Rectification u/s 154 without careful consideration of the facts and circumstances of the case, and the basic issue whether section 154 could be invoked at all

Guidelines on Using Section 154 for Tax Assessment Corrections: Avoid Extensive Reasoning, Consult Superiors, Prevent Revenue Loss.

The circular emphasizes the careful consideration required when invoking Section 154 of the Income Tax Act, 1961, for rectifying assessments based on audit objections. It highlights that Section 154 should only address mistakes 'apparent from the record' and not those requiring extensive reasoning or external evidence. It cautions against using Section 147(b) without fresh information, noting conflicting court decisions on this matter. The circular suggests using Section 263 for significant tax errors when appeals are not involved, urging Income Tax Officers to consult with their superiors to choose appropriate remedial measures and avoid revenue loss. These guidelines also apply to other direct tax statutes.