Section 287 Rectification of mistake.

Income-tax Act, 2025

At a Glance

These texts reproduce Clause/Section 287 dealing with "Rectification of mistake" as drafted in the Income Tax Bill, 2025 (Old Version) and as enacted (Section 287 of the Income-tax Act, 2025). The provision confers power on specified income-tax authorities to amend orders and intimations to correct mistakes apparent on the record, sets procedural safeguards for increasing liability, prescribes time limits for rectification and mandates outcomes (refunds/notice of demand). The provision affects taxpayers, deductors, collectors and various income-tax authorities. Effective date or decision date: Not stated in the document.

Background & Scope

Statutory hooks: Clause/Section 287 is placed under "Procedure for assessment" in the Income Tax Bill/Act, 2025. The provision operates in relation to income-tax authorities referred to in section 236. The primary purpose is rectification of mistakes apparent from the record by amendment of (a) orders passed under the Act, (b) intimations or deemed intimations under a specified section (270(1) in the Act; 271(1) in the Bill (Old Version)), and (c) intimations u/s 399. The text supplies no further definitions or explanatory notes beyond these references. Not stated in the document: legislative debates or explanatory memorandum justifying the amendment, the precise content of sections 236, 270(1)/271(1) or 399, or definitions of "mistake apparent from the record".

Statutory Provision Mode

Text & Scope

Section/Clause 287 authorises an income-tax authority referenced in section 236 to amend, for the purpose of rectifying any "mistake apparent from the record," orders passed under the Act and specified intimations (including deemed intimations). The authority may amend such orders/intimations in relation to any matter except matters that have been considered and decided in appeal or revision proceedings. The provision contemplates both suo motu amendments by the authority and amendments made following application or notification by specified parties.

Interpretation

The textual indicators emphasise a narrow jurisdiction: rectification is limited to "mistake apparent from the record" (a standard phrase indicating an obvious error on the face of the record). The provision distinguishes between matters already adjudicated in appellate or revisional proceedings (which are excluded). The text signals an intent to balance administrative correction of clear errors with protection of finality where higher proceedings have considered the matter. The requirement of notice and opportunity to be heard before any amendment that increases liability demonstrates an interpretive principle favouring audi alteram partem before adverse amendments. The text does not elaborate statutory tests for what constitutes a mistake apparent from the record. Not stated in the document: any definition, exhaustive list or examples of "mistake apparent from the record" or standard of proof.

Exceptions/Provisos

Key carve-outs and conditions set by the text:

• Amendments cannot relate to matters "considered and decided in any proceeding by way of appeal or revision." (sub-section (2))
• No amendment that enhances assessment, reduces a refund or otherwise increases liability shall be made without (a) notice of intention to amend and (b) a reasonable opportunity of being heard. (sub-section (4))
• Time limit: except as provided in section 288, no amendment under this section shall be made after four years from the end of the financial year in which the order or intimation sought to be amended was passed. (sub-section (8))
• Procedure for disposal of applications: where an application for amendment is received from the assessee/deductor/collector, the authority shall pass an order making the amendment or refusing the claim within six months from the end of the month in which the application is received (subject to the four-year bar). (sub-section (9))

Illustrations

• Example 1: An order under the Act contains a clerical arithmetic error that understates tax payable. u/s 287, the relevant authority may amend the order to correct that arithmetic mistake, provided the amendment is not barred by appeal/revision proceedings and procedural safeguards for increasing liability are observed. (The document does not give a factual illustration; this example is a textual, realistic scenario consistent with the provision.)
• Example 2: A deemed intimation u/s 270(1)/271(1) contains an incorrect PAN or typographical mistake affecting the assessee's name; the authority may amend the intimation as a mistake apparent from the record. Not stated in the document whether electronic rectification or time-stamping requirements apply. Not stated in the document: procedural form for application by the taxpayer other than timeline in sub-section (9).

Interplay

The provision cross-refers to sections 236, 270(1)/271(1), 288 and 399, and to section 289 for deeming of notices of demand. It also imposes duties on the Assessing Officer regarding refunds and service of notice of demand for enhanced assessments. The text does not set out the content of those cross-referenced provisions; therefore, practical interpretation will depend on their terms. Potential interpretive points arising from the text alone include whether the four-year limitation interacts with any other limitation or exclusion in section 288 and how the "deemed to be issued u/s 289" treatment interacts with appeal or recovery procedures. Not stated in the document: detailed interaction with rules, notifications or earlier rectification jurisprudence.

Differences between the two provisions and practical impact

• Reference to other sections: The Bill (Old Version) in clause 287(1)(b) refers to "intimation or deemed intimation u/s 271(1)"; the enacted Section 287 of the Income-tax Act, 2025 refers to "intimation or deemed intimation u/s 270(1)".
  • Practical impact: the Act corrects or alters the cross-reference to the intended provision. If section 270(1) is the operative provision governing intimations, the Act restores conformity; if not, the change could alter the category of intimations amendable under the rectification provision. The document does not state which cross-reference is correct in the broader code. Not stated in the document.
• Scope language in sub-section (2): The Bill's clause 287(2) permits amendment "of any order under sub-section (1) in relation to any matter, other than the matter considered and decided in any proceeding by way of appeal or revision, relating to such order." The Act expands the language to "amend any order or intimation under sub-section (1) in relation to any matter, other than the matter considered and decided in any proceeding by way of appeal or revision, relating to such order or intimation."
  • Practical impact: the Act explicitly brings intimations within the non-appealable rectification scope, removing any ambiguity whether intimations (as distinct from orders) are treated the same for the limitation in clause (2).
• Consistency of references to "intimation": Multiple clauses in the Act reintroduce the word "intimation" where the Bill either omitted it or used slightly different phrasing (notably sub-section (8) in the Bill refers only to "order sought to be amended" while the Act says "order or intimation sought to be amended").
  • Practical impact: this consistent inclusion clarifies that time limits, amendment powers and procedural safeguards apply equally to both orders and intimations.
• Prescriptive language differences: Minor drafting differences appear (e.g., Bill uses "in such form as prescribed" in clause (7) vs Act's "in such form as may be prescribed").
  • Practical impact: negligible substantive effect; the Act's phrasing is the standard enabling language for delegated legislation.
• Other changes: The Act adds slight reordering or punctuation differences in sub-section (4) (explicit addition "to such assessee or deductor or collector, as the case may be,-- (a) ...") and in other places clarifies the actor in sub-section (6) as "The Assessing Officer shall make refund which may be due to the assessee or the deductor or the collector, where an amendment reduces the assessment or otherwise reduces the liability of such assessee or the deductor or the collector."
  • Practical impact: clarifies operational responsibility for refunds and notice of demand; substance remains aligned with the Bill, but the Act is marginally clearer on the actors and recipients.

Practical Implications

• Compliance and risk areas: Taxpayers, deductors and collectors should be aware that orders and certain intimations can be amended to correct apparent mistakes; where such amendments increase liability, they are entitled to notice and a hearing. Organisations should monitor intimations and orders for possible mistakes and seek rectification promptly because of the four-year outer limit (subject to section 288 exceptions). The document does not specify how taxpayers should apply for rectification (form/procedure beyond timelines). Not stated in the document: prescribed application form or electronic process.
• Record-keeping/evidence: Because the provision contemplates rectification of "mistake apparent from the record," maintaining clear contemporaneous records and the record that produced the order/intimation will be critical to demonstrate that an error is or is not "apparent." The text requires written orders for amendments and service of notices of demand; retaining copies of communications will be important. Not stated in the document: evidentiary thresholds or timeline for producing documents on hearing.

Key Takeaways

• Section/Clause 287 empowers specified income-tax authorities to rectify mistakes apparent on the record by amending orders and certain intimations.
• Amendments are excluded where the matter has been considered and decided in appeal or revision proceedings.
• Before any amendment that increases liability, the authority must give notice of intention and a reasonable opportunity of being heard.
• Refunds must be made where amendments reduce assessment or liability; Assessing Officers must serve notices of demand where amendments increase liability and such notices are deemed issued u/s 289.
• There is a four-year outer limit from the end of the financial year in which the order or intimation was passed, subject to section 288 exceptions; applications must be disposed within six months from the relevant month-end.
• The enacted Act clarifies and consistently includes "intimation" within the scope and time-limit language, and corrects certain cross-references and drafting variations present in the Bill text.
• Several operational details-precise definitions of "mistake apparent from the record", procedure/formalities for applications, and interaction with other provisions-are not stated in the document and will need reference to the rest of the statute or administrative rules.

---

Full Text:

Section 287 Rectification of mistake.

Rectification of mistake: tax authorities may amend orders and intimations, with notice and hearing before raising liability. Section 287 authorises specified income tax authorities to amend orders and intimations to rectify mistakes apparent from the record, excluding matters considered and decided in appeal or revision. Amendments that increase liability require notice of intention and a reasonable opportunity of being heard; reductions in liability require refund by the Assessing Officer and increases require service of a notice of demand. A four year outer limitation from the end of the financial year of the original order or intimation applies, subject to section 288, and taxpayer applications must be disposed within six months of the relevant month end.