Rectification under section 154 cannot rely on a later Tribunal view to reopen an earlier appellate order.

Rectification under section 154 of the Income-tax Act is limited to mistakes apparent from the record, meaning clear and patent errors existing when the original order was passed. A later Special Bench decision cannot be used to treat an earlier appellate order as or open it to rectification if that later view was not available at the time. The CBDT circular relied on was held inapplicable because it addressed subsequent interpretation by the Supreme Court, not a later Tribunal ruling. The proposed rectification was therefore an impermissible indirect challenge to the earlier order, and the Revenue's attempt failed.

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Issues: Whether a rectification application could be entertained under section 154 of the Income-tax Act, 1961 on the basis of a subsequent Special Bench decision rendered after the appellate order was passed.

Analysis: Rectification under section 154 is confined to glaring, patent and obvious mistakes apparent from the record. A later decision cannot convert an otherwise valid order into a mistake apparent from the record if that later view was not in existence when the original order was made. The contrary Special Bench ruling in the assessee's later year could not be used to reopen the earlier appellate order through rectification. The CBDT circular relied upon was held inapplicable because it dealt with subsequent interpretation by the Supreme Court, not a later Tribunal decision. The issue was therefore not amenable to rectification and the revenue's attempt was treated as an impermissible indirect challenge to the earlier appellate order.

Conclusion: The rectification application was rightly rejected; the appeal by the Revenue failed.

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