Rectification under section 154 cannot revisit a debatable section 80M computation issue involving prior depreciation set-off.

Section 154 rectification could not be used to withdraw section 80M deduction on the basis that earlier years' depreciation had first to be set off, because the order depended on a debatable interpretation of the computation sequence. The Calcutta HC noted that the question whether relief under section 80M was to be allowed before or after adjustment of past depreciation admitted more than one possible view. Since a point capable of two views is not a mistake apparent from the record, the matter lay outside the narrow rectificatory power under section 154. The rectification order was therefore unjustified and the assessee succeeded.

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Issues: Whether the Income-tax Officer could invoke rectification under section 154 of the Income-tax Act, 1961 to withdraw deduction under section 80M on the footing that depreciation of earlier years had to be set off before granting the relief, and whether such a question involved a mistake apparent from the record.

Analysis: The determination of whether section 80M relief was to be allowed before or after deduction of past depreciation admitted of more than one possible view. A point capable of two views cannot be characterised as an obvious mistake apparent from the record. As the issue required prolonged reasoning and was debatable, it fell outside the limited rectificatory jurisdiction under section 154.

Conclusion: The rectification order was not justified and the assessee succeeded on the reference.

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