Omission to claim exempt salary allowances is not a rectifiable mistake, but the exemption claim may still be re-examined on verification.

Omission to claim exempt salary allowances in the original return is treated as the assessee's own omission and not a mistake apparent from the record, so rectification is not available on that basis. The processing adjustment was regarded as permissible under the applicable return-processing provisions, and the rectification request was rejected. At the same time, the assessee's exemption claim under section 10 was not foreclosed on merits; it was restored for fresh examination with supporting evidence and verification by the assessing authority. The document therefore notes denial of rectification, but remand of the exemption issue for factual scrutiny and lawful reconsideration.

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Issues: (i) Whether the omission to report exempt salary allowances in the return of income constituted a mistake apparent from the record so as to justify rectification under section 154; (ii) Whether the assessee's claim for exemption under section 10 could be examined on merits on remand.

Issue (i): Whether the omission to report exempt salary allowances in the return of income constituted a mistake apparent from the record so as to justify rectification under section 154.

Analysis: The return disclosed salary income without claiming the exempt allowances in the relevant schedule, while the rectification request sought to introduce those claims later. On that basis, the omission was attributable to the assessee in the original return and did not amount to a patent error in the processing order. The adjustment made while processing the return was also treated as permissible under the then-applicable processing provisions.

Conclusion: The rectification claim was not maintainable and the disallowance of rectification was upheld.

Issue (ii): Whether the assessee's claim for exemption under section 10 could be examined on merits on remand.

Analysis: Although the claim had not been properly made in the return, the assessee asserted eligibility for the exempt allowances and expressed willingness to produce supporting material. In the interest of substantive justice, the matter was considered fit for fresh examination with supporting evidence and verification by the assessing authority.

Conclusion: The exemption claim was restored for fresh consideration in accordance with law after verification.

Final Conclusion: The challenge to rectification failed on merits, but the exemption issue was sent back for factual verification, resulting in only partial relief to the assessee.

Ratio Decidendi: An omission in the original return to claim a deduction or exemption is not, by itself, a mistake apparent from the record for rectification, though a bona fide statutory claim may be examined afresh on proper verification where justice so requires.

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