Rectification for apparent mistake cannot reopen debatable interest claims under the Income-tax Act, 1961.

Rectification under section 154 of the Income-tax Act, 1961 cannot be used to withdraw interest allowed under section 214 where the legal position is debatable and two reasonable views are possible. The Court held that the question whether further interest was payable up to the date of rectification was not a patent mistake apparent from the record, since there was support for the assessee's position and the issue involved mixed factual and legal arguments. The rectification order was therefore beyond the scope of section 154, and the Tribunal's cancellation of that order was upheld in favour of the assessee.

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Issues: Whether the order under section 154 of the Income-tax Act, 1961 could be invoked to withdraw interest allowed under section 214 on the ground that the matter was debatable and involved long-drawn arguments on facts and law.

Analysis: The controversy turned on whether the grant of further interest on the amount refundable pursuant to rectification was a patent mistake apparent from the record. The Court noted that there was support for the view that interest could be payable up to the date of rectification, and that the legal position on the availability of interest under section 214 in such circumstances was not free from debate. Where two views were reasonably possible, the issue could not be treated as a mistake apparent from the record so as to justify rectification under section 154.

Conclusion: The rectification order was beyond the scope of section 154, and the cancellation of that order by the Tribunal was upheld in favour of the assessee.

Ratio Decidendi: A matter on which two reasonable views are possible is not a mistake apparent from the record and cannot be corrected under section 154 of the Income-tax Act, 1961.

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