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2023 (2) TMI 809 - BOMBAY HIGH COURTDeclaration under the Direct Tax Vivad Se Vishwas Act, 2020 - Taxation of LTCG @ 30% or 20% - correct tax liability determined earlier while issuing Form 3 - CIT-A revising the petitioner’s declaration by issuing a revised Form 3 seeking additional demand - Rectification of mistake u/s 154 - Rectification application was allowed holding that there was an error in treating the income as ‘taxable business income’ instead of ‘taxable long term capital gains’ - HELD THAT:- The order having been passed on the application for rectification under section 154 assuming that the same was erroneous, as alleged, cannot simply be brushed aside. It would have been open to the authorities to take remedial measures to question the legality and correctness of the order. In so far as the claim under the Act of 2021 is concerned, a clarification issued by the Central Board of Direct Taxes clearly envisages that if there is a reduction or increase in the income and tax liability of the assessee as a result of rectification, the disputed tax in such cases would be calculated after giving effect to the rectification order passed, if any. Reference in this regard can be made to the clarification issued by the Central Board of Direct Taxes (“CBDT”) vide circular No.9 of 2020 dated 22 April 2020 and in particular Question No.25 thereof, it becomes clear that the respondents ought to have taken into consideration the aforementioned Circular, as also considered the rectification order passed, which the respondents clearly missed to do in the present case. In our opinion, issuance of revised Form 3 is clearly not sustainable. Be that as it may, we allow this petition. The orders impugned dated 20th September 2021 and 29th October 2021 are set aside. The respondents are directed to act in furtherance of the petitioner’s declaration by way of Form-3.
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