Rectification cannot reopen final relief without an apparent mistake; prior binding findings on statutory benefit must be respected.

Section 154 rectification cannot be used to withdraw relief under section 89(1) where earlier rectification and appellate orders had already held the relief admissible and had attained finality. The later notice proceeded on the mistaken premise that the assessee had not claimed the relief in the return, even though the claim had been made pursuant to the prior orders and the relevant information had been called for and examined. No mistake apparent from the record was shown in the original order allowing the relief, so the attempt to revisit a concluded and justified grant of statutory benefit was invalid. The notice and consequential rectification order were quashed.

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Issues: (i) whether the notice and consequent rectification proceedings under section 154 of the Income-tax Act, 1961 were valid when earlier orders had already held that relief under section 89(1) was allowable; (ii) whether the earlier order granting relief under section 89(1) suffered from any mistake apparent from the record warranting withdrawal of the relief.

Issue (i): whether the notice and consequent rectification proceedings under section 154 of the Income-tax Act, 1961 were valid when earlier orders had already held that relief under section 89(1) was allowable.

Analysis: The earlier rectification order and the appellate order had categorically held that relief under section 89(1) was admissible and had attained finality. The later notice under section 154 ignored those binding findings and proceeded on a ground that the assessee had not claimed the relief in the return, although the subsequent claim had been made in pursuance of the earlier orders and the requisite information had been called for and considered. The rectification proceedings were therefore founded on a misconceived premise and showed no proper application of mind.

Conclusion: The notice and the subsequent order under section 154 were invalid and liable to be quashed.

Issue (ii): whether the earlier order granting relief under section 89(1) suffered from any mistake apparent from the record warranting withdrawal of the relief.

Analysis: There was no apparent mistake in the earlier order allowing relief under section 89(1). The assessee's entitlement to the relief had already been recognized in prior final orders, and the later attempt to withdraw it was not based on any error evident from the record but on an afterthought not reflected in the notice. In these circumstances, the rectification power could not be used to undo a concluded and justified grant of relief.

Conclusion: No mistake apparent from the record was shown, and withdrawal of the relief was unwarranted.

Final Conclusion: The writ petition succeeded, the impugned notice and consequential rectification order were quashed, and the assessee was held entitled to the benefit already allowed under section 89(1) with consequential payment of dues.

Ratio Decidendi: Rectification under section 154 cannot be used to disturb a final order granting statutory relief unless a mistake apparent from the record is clearly shown, and binding earlier findings allowing the relief must be respected.

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