The present invention provides process for preparation of Crystalline Erlotinib HCl (I) Form-SE characterized by X-ray powder diffraction pattern comprising at least 5 characteristic 2θ° peaks selected from the XRPD peak set of 5.60, 10.00, 11.40, 13.00, 13.50, 15.20, 18.40, 20.65, 21.86, 23.5, 31.80, 32.13, 32.80, 34.40±0.20 2θ°, DSC isotherm comprising the endothermic peaks ranging between 213 to 217° C. (Peak −1) and 225 to 235° C. (Peak −2) and IR absorption characteristic peaks at approximately 3278 cm−1, 1948 cm−1, 1871 cm−1, 1632 cm−1, 1164 cm−1, 1024 cm−1, 940 cm−1 and 742 cm−1 useful as active pharmaceutical ingredient in pharmaceutical compositions for the treatment cancer.