CBDT Empowers CPC Bengaluru to Rectify Errors and Issue Demand Notices Under IT Act

Notification No. 155/2025, dated 27-10-2025

1. Background

The Central Board of Direct Taxes (CBDT) has issued an important notification authorising the Commissioner of Income-tax, Centralised Processing Centre (CPC), Bengaluru, to exercise powers under Section 154 of the Income-tax Act, 1961 for rectification of mistakes apparent from records.

This move aims to ensure speedy correction of processing errors and accurate determination of refunds, demands, and tax liabilities for taxpayers whose returns are handled through CPC Bengaluru.

2. Scope of Rectification Powers under Section 154

The Commissioner of Income-tax (CPC), Bengaluru, is empowered to rectify any mistakes apparent from the record, including but not limited to:

1. Errors in Refunds Already Issued – Corrections in cases where excess or short refunds have been processed.
2. Non-consideration of Prepaid Tax Credits or Eligible Reliefs – Such as TDS, TCS, Advance Tax, or relief under Sections 89, 90, 90A, or 91.
3. Incorrect Computation of Interest under Section 244A – Rectification of errors in interest calculations on refunds.
4. Any Other Mistake – Resulting in incorrect tax computation, refund determination, or demand generation during return processing.

These rectifications can be carried out to ensure fairness and accuracy in taxpayer assessments and refund settlements.

3. Power to Issue Demand Notices under Section 156

In addition to rectification, the Commissioner (CPC) has also been authorised to issue demand notices under Section 156 of the Income-tax Act, wherever the rectification results in additional tax liability.

This ensures seamless follow-up action and alignment with statutory compliance procedures.

4. Delegation of Powers

To streamline administration, the Commissioner (CPC), Bengaluru, may:

• Delegate these powers in writing to Additional Commissioners or Joint Commissioners of Income-tax; and
• Such officers may, in turn, authorise Assessing Officers (AOs) within their specified jurisdiction.

This delegation covers all cases processed through the interface between the Assessing Officer and CPC Bengaluru, ensuring efficient handling of rectification-related matters across regions.

5. Objective and Impact

The notification is designed to:

• Expedite correction of processing errors,
• Reduce taxpayer grievances arising from mismatched credits or interest miscalculations,
• Ensure uniformity and accountability in the rectification process, and
• Strengthen the coordination between field officers and CPC Bengaluru for transparent tax administration.

6. Conclusion

With this authorisation, CPC Bengaluru gains enhanced functional autonomy to handle rectifications, refund corrections, and demand adjustments under Section 154, along with issuing necessary demand notices under Section 156.

This step reinforces the CBDT’s commitment to efficient, technology-driven tax administration and timely redressal of taxpayer issues.

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