(1) Where an income tax authority or the Appellate Tribunal finds by own motion or based on written application from the assessee or information from any other source that an error apparent in any order passed thereby, the income tax authority or the Appellate Tribunal may amend the error by order passed in writing:

    Provided that no amendment under this sub-section shall be made after the expiration of 4 (four) years from the date of the order sought to be amended.

(2) Where an assessee, by an application in writing in relation to an assessment year, brings to the notice of the Deputy Commissioner of Taxes of the claim that—

(a) a sum payable under this Act has been paid in amount higher than the due amount, or

(b) the due credit of a sum paid under this Act has not been given, in such cases the Deputy Commissioner of Taxes shall create refund, or as the case may be, give credit of the amount in the assessment year in which the sum was to be given credit if the claim of the assessee is found valid and correct after due verification.

(3) No amendment under sub-section (1) which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee shall be made unless the parties affected thereby have been given a reasonable opportunity of being heard.

(4) Where any such error as is referred to in sub-section (1) is brought to the notice of the authority concerned by the assessee and no amendment is made by such authority within the financial year next following the date in which the error is brought to its notice, the amendment under that sub-section shall be deemed to have been made so as to correct the error and all the provisions of this Act shall have effect accordingly.

(5) Where in respect of any completed assessment of a partner in a firm it is found on the assessment of the firm or on any reduction or enhancement made in the income of the firm under sections 213, 285, 289, 292, 294, 295 or 304 that the share of the partner in the profit or loss of the firm has not been included in the assessment of the partner, or, if included, is not correct, the inclusion of the share in the assessment or the correction thereof, as the case may be, shall be deemed to be correction of an error apparent from the record within the meaning of this section, and the provisions of sub-section (1) shall apply thereto accordingly.

(6) Where as a result of proceedings initiated under section 212, a firm or an association of persons is assessed, and the Deputy Commissioner of Taxes concerned is of opinion that it is necessary to compute the total income of a partner in the firm or a member of the association of persons, as the case may be, the Deputy Commissioner of Taxes may proceed to compute the total income and determine the sum payable on the basis of such computation as if the computation is a correction of an error apparent from the record within the meaning of this section, and the provisions of sub-section (1) shall apply accordingly.