Rectification for omitted foreign salary upheld, while treaty relief and foreign tax credit were directed to be examined.

Rectification under section 154 was treated as valid where a resident assessee had omitted overseas salary from the Indian return, because the omission was a factual mistake apparent from the record and not a debatable issue. The Tribunal accepted taxability of global income on the stated facts and upheld the rectification bringing the foreign salary to tax. It also noted the assessee's claim for treaty relief and foreign tax credit, and directed the Assessing Officer to examine DTAA eligibility and give effect to the first appellate direction after the required documents were filed.

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Issues: Whether the rectification made under section 154 of the Income-tax Act, 1961, by bringing to tax salary income received in the USA and consequentially dealing with foreign tax credit and treaty relief, was valid when the assessee was a resident liable on global income and the omission in the return was factual rather than debatable.

Analysis: The assessee had filed the return as a resident/ordinary resident and had claimed foreign tax credit while not disclosing the salary received from JP Morgan, USA in the Indian return. On the facts, the omission of the overseas salary from the return was treated as a factual mistake apparent from the record, not as a debatable issue. The Tribunal therefore accepted the invocation of rectification under section 154. At the same time, it noted the assessee's claim of treaty relief and foreign tax credit, and directed the Assessing Officer to give effect to the first appellate direction and examine the assessee's eligibility under the DTAA after the necessary documents were filed.

Conclusion: The rectification under section 154 was upheld, and the assessee obtained only partial relief in the form of a direction to consider treaty benefits and pass the order giving effect accordingly.

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