ITAT Chennai grants rectification petition based on higher court decisions

The ITAT Chennai allowed the assessee's miscellaneous petition for rectification of mistake under section 254(2) of the Income-tax Act, based on subsequent decisions of higher courts. The Tribunal held that the subsequent law laid down by higher courts is binding for rectification purposes. The Tribunal confirmed the settlement of the issue by the Supreme Court, granting the assessee the benefit of deduction under section 10(10C) of the Income-tax Act. Consequently, the Tribunal modified the impugned order, dismissed the Revenue's appeal, and pronounced the order in court on March 5, 2010.

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Issues:
Rectification of mistake under section 254(2) of the Income-tax Act based on subsequent decisions of higher courts.

Analysis:
The Appellate Tribunal ITAT Chennai addressed a miscellaneous petition filed by the assessee against the order of the Tribunal in the Revenue's appeal for the assessment year 2004-05. The assessee contended that the issue had been settled by the decisions of the hon'ble Supreme Court and the hon'ble Bombay High Court. The assessee argued that the subsequent decision of higher courts should be considered for rectifying the mistake under section 254(2) of the Income-tax Act. The Tribunal agreed that the subsequent law laid down by higher courts is binding and can be considered for rectification. The issue was further confirmed to be settled by the decision of the hon'ble Supreme Court in a specific case, leading to the Tribunal allowing the appeal and dismissing the Revenue's appeal.

The Tribunal highlighted that the assessee, being an ex-employee of the Reserve Bank of India, was entitled to the benefit of deduction under section 10(10C) of the Income-tax Act based on the decision of the hon'ble Supreme Court. Consequently, the impugned order was modified, and the appeal of the Revenue was dismissed. The Tribunal pronounced the order in court on March 5, 2010, ultimately allowing the miscellaneous petition filed by the assessee.

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