Rectification for apparent mistake upheld where deduction recomputation had to account for Section 80IB before Section 80HHC relief.

Rectification was held permissible where the recomputation of deduction under Section 80HHC, after reducing the deduction allowable under Section 80IB as required by Section 80IA(9), was patent and ex facie apparent from the record. The Court applied binding jurisdictional precedent to hold that Section 154 is not limited by the date of the original order when later authoritative interpretation shows the earlier view to be contrary to law. Divergent decisions of other High Courts did not make the issue debatable or bar rectification. The assessee's challenge therefore failed.

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Issues: Whether rectification under Section 154 of the Income-tax Act, 1961 was sustainable in relation to the computation of deduction under Section 80HHC after reducing the deduction allowable under Section 80IB in terms of Section 80IA(9), and whether the existence of divergent High Court views made the issue debatable so as to bar rectification.

Analysis: The Court held that a mistake is apparent from the record when it is patent and ex facie discernible, and that Section 154 cannot be confined by reference only to the date of the original order if later authoritative interpretation shows the original view to be contrary to law. Applying the binding Full Bench decision on the scope of rectification, the Court found that the recomputation of deduction under Section 80HHC by reducing the amount allowable under Section 80IB, as mandated by Section 80IA(9), was a correctable mistake apparent from the record. The existence of contrary decisions from other High Courts did not displace the binding jurisdictional precedent.

Conclusion: Rectification under Section 154 was valid and the assessee's challenge failed.

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