Rectification under section 154 fails once the underlying order is set aside and no longer exists in law.

Rectification under section 154 cannot survive where the underlying order under section 155 has already been set aside and that finding has attained finality. The rectification power operates only while the original order sought to be corrected continues to exist in law; once the parent order ceases to have legal effect, the foundation for invoking section 154 disappears. On that basis, the rectification proceedings were held unsustainable and the request to require a reference was rejected, with no referable question of law surviving.

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Issues: Whether a rectification order under section 154 of the Income-tax Act, 1961 could survive when the original order passed under section 155 of the Income-tax Act, 1961 had already been held invalid and had attained finality.

Analysis: The rectification provision could operate only if the original order sought to be corrected continued to exist in law. Once the order under section 155 had been set aside and the challenge to that finding had failed, the foundation for invoking section 154 disappeared. In these circumstances, no referable question of law survived for consideration.

Conclusion: The rectification proceedings were unsustainable, and the request to require a reference was rejected.

Final Conclusion: The attempt to sustain rectification after the parent order had ceased to have legal effect was held to be futile, and the matter was dismissed.

Ratio Decidendi: A rectification order cannot stand independently when the original order sought to be rectified has already been set aside and has become final in law.

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