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The rectification case report at (2023] 459 ITR 36 (Cal) showcase an interesting situation wherein the non resident assessee mistakenly included a non taxable salary income accruing outside india in his  return only because it was received in NRE account in India but later attempted filing a revised return. As the original was perhaps late filed the revised failed to take effect.

He chose a rectification route over appeal and so made an application to CPC u/s154. Eventually the same got dismissed and all the appellate authorities even showed helplessness stating the issue is debatable.

The High Court noticed circulars of the board incl 1955 landmark circular as well as few jurisdictional pronouncements in favour of the assessee which according to it could have been good basis for undertaking rectification.

The Court in so many words held that a judicial decisions operate retrospectively so that the AO, the appellate authorities incl ITAT should  consider both the earlier and subsequent decisions to the order under rectification to pursue the law on the subject in disposing rectification applications.

Now crucial question is whether CPC is fit to read the law in this manner in their handing of rectification . The answer would be NO and that is exactly what happened in this case.

It is therefore more often than not a taxpayer chose to file an appeal over rectification which is both an expensive route and an effortful way.

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