Rectification of apparent record error in penalty orders is distinct from review when a material fact was overlooked.

A Tribunal may use rectification power under section 35 of the Income-tax Act, 1922 to correct a penalty order where it overlooked a material fact already on record during the hearing. The governing test is whether there is a mistake apparent from the record; an omission caused by the Tribunal's own oversight can be rectified even if it affects the quantum of penalty. That exercise is treated as correction of an apparent error, not an impermissible review based on a change of opinion. The rectification was therefore upheld and the challenge failed.

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Issues: Whether the Tribunal could invoke section 35 of the Income-tax Act, 1922 to rectify its earlier penalty order on the ground that it had overlooked a material fact brought to its notice during the hearing, and whether such rectification amounted to an impermissible review.

Analysis: The writ petition challenged the Tribunal's power to amend its order reducing the penalty after finding that a substantial reduction in assessed income, which had a bearing on the quantum of penalty, had been omitted from consideration when the original order was written. The governing test under section 35 was whether there was a mistake apparent from the record. The omission was not due to any fault of the assessee, but arose from the Tribunal's own oversight in not giving effect to a material fact already on record. In such circumstances, the power of rectification was held to extend to correcting the mistake, and the case was distinguished from a true review based merely on a change of opinion.

Conclusion: The Tribunal had jurisdiction to rectify the mistake under section 35, and the challenge to the rectification order failed.

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