Filed ITR-U earlier? Your Sec 154 rectification rights now rest with the Jurisdictional AO, not CPC. See why it changed, risks, and action steps to stay compliant.
- CPC has moved rectification rights for all past ITR-U filings to the taxpayer’s Jurisdictional Assessing Officer (JAO).
- Only the JAO can now pass Sec 154 orders—opening the door to scrutiny if large errors emerge.
- Act fast: review your ITR-U, collect supporting docs, and be ready to meet your AO.
Quick Refresher — What Is ITR-U?
ITR-U (under Sec 139 (8A)) lets taxpayers voluntarily update a return within 24 months, paying additional tax to avoid penalty or prosecution. Think of it as a “last-chance correction window.
Section 154: The Rectification Route
Sec 154 allows correction of “mistake apparent from record”—e.g., mis-matched TDS, arithmetic slip, or overlooked deduction.
• Earlier, CPC Bengaluru handled these online for most returns.
• But for ITR-U, many errors are legal/factual, not just numerical, and CPC’s automated engine can’t decide them.
What Changed Today?
Taxpayers woke up to CPC emails stating:
“Rectification Rights transferred to Jurisdictional AO under Sec 154.”
Meaning:
- CPC has forwarded your rectification request & data to the AO who has territorial jurisdiction over your PAN.
- AO now wields full powers—pass rectification order, call for documents, or even open scrutiny if discrepancies look material.
Why the Income-Tax Department Did This
| Pain-Point at CPC | Solution via JAO |
| Automated rules can’t judge complex claims in ITR-U. | AO can examine facts, conduct hearings. |
| High volume of pending Sec 154 petitions. | Decentralises workload. |
| Legal risk if CPC grants/denies relief incorrectly. | AO’s quasi-judicial order is safer. |
Implications for You
Direct Interface with AO
• Expect notices via e-filing portal or email.
• Hearings may be in-person or video-conference.
Greater Scrutiny Potential
• AO may extend inquiry beyond your rectification issue.
• Keep books, bank statements, and TDS proofs handy.
Timeline
• AO must act within 4 years from the end of the FY in which the order sought to be rectified was passed.
• You can file a fresh Sec 154 application if you haven’t already.
Action Checklist
- Search mailbox/portal for the CPC transfer email.
- Download your ITR-U acknowledgment & computation.
- Identify the specific error (e.g., TDS credit mismatch).
- Gather evidence—Form 26AS, AIS, rent receipts, etc.
- Log into the e-filing portal → Services → Rectification → “Pending with AO” to track status.
- If AO issues notice under Sec 154/143(2), respond within 15 days (or as given).
FAQs
I haven’t filed any rectification yet—do I need to act?
Not immediately. Only existing or future Sec 154 requests for ITR-U will route to AO.
Can the AO revise my additional tax liability?
Yes; if AO finds under-reporting, they can issue a fresh demand with interest & penalty.
Will this impact normal (non-ITR-U) returns?
No. CPC continues to handle most Sec 154 online for regular ITRs.
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Disclaimer
The information above is for educational purposes only and should not be construed as professional advice. Tax laws change; consult a qualified advisor for personalised guidance.