Answer

1. F

   Facts

   Rectification fixes an obvious mistake in the record. Reassessment reopens income that escaped assessment. Revision lets a senior officer correct an assessment order that is erroneous and prejudicial to revenue.

2. P

   Provisions and law

   • Sec 263, Income-tax Act 1961 (now Sec 377, Income-tax Act 2025)The Principal Commissioner or Commissioner can revise an assessment order that is erroneous and prejudicial to revenue, after giving a hearing, within 2 years from the end of the financial year of the order.
   • Sec 154, Income-tax Act 1961 (now Sec 287, Income-tax Act 2025)Rectification of mistakes apparent from the record.
   • Sec 148, Income-tax Act 1961 (now Sec 280, Income-tax Act 2025)Notice for reassessment where income escaped assessment.
3. A

   Analysis

   Knowing which power is used tells you how to defend. Rectification cannot deal with debatable issues. Reassessment needs information suggesting escaped income and follows the show cause procedure. Revision needs both error and loss to revenue and must come within 2 years from the end of the year of the order.

4. C

   Conclusion

   1. 1Read which section the notice cites.
   2. 2Match it with the right defence.
   3. 3Check the time limit for that power.
   4. 4Reply accordingly.

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