Omission to tax disclosed dividend income can be rectified as a patent mistake on the existing record.

An omission to tax dividend income already disclosed in the return and included in the computation was treated as a mistake apparent from the record. Because the income was already before the Assessing Officer and the error was patent on the existing record, rectification could be made without a fresh factual enquiry. The rectification under section 154 was therefore upheld to the extent it brought the dividend income to tax at the applicable rate, and the challenge to that limited extent failed.

---

---

Issues: Whether the omission to tax dividend income, which had been offered by the assessee and was already part of the computation, constituted a mistake apparent from the record amenable to rectification under section 154.

Analysis: The dividend income had been disclosed by the assessee and tax had been paid at the applicable rate, but the assessing order under section 143(3) did not consider that income. On those facts, the omission was not a matter requiring fresh enquiry into new facts for deciding effective connection with the permanent establishment; rather, it was an evident omission from the record available before the Assessing Officer. Such an obvious and patent error could be corrected in rectification proceedings.

Conclusion: The rectification under section 154 was valid to the extent it brought the dividend income to tax at 15%, and the assessee's challenge to that extent failed.

Final Conclusion: The rectification was sustained in relation to the dividend income, and the Revenue succeeded only to that limited extent.

Ratio Decidendi: An omission to give effect to income already disclosed and taxed in the return constitutes a mistake apparent from the record and can be corrected under rectification powers without undertaking a fresh factual investigation.

---