Rectification under section 254(2) not available where a retrospective amendment was stayed and no apparent mistake existed.

A retrospective amendment inserting section 80J(1A) to require deduction of borrowed moneys and debts in computing capital employed could not, while its operation was stayed in related Supreme Court proceedings, be treated as creating a mistake apparent from the record for section 254(2) rectification. The Tribunal noted that the alleged inconsistency between its earlier order and the amended provision did not satisfy the standard for rectification where the amendment's operation was under challenge and stayed. On that basis, the miscellaneous application for rectification was not maintainable and was rejected.

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Issues: Whether the Department's miscellaneous application seeking rectification under section 254(2) of the Income-tax Act, 1961 could be entertained on the basis of the retrospective insertion of sub-section (1A) in section 80J of the Income-tax Act, 1961, which required borrowed moneys and debts to be deducted while computing capital employed.

Analysis: The retrospective amendment introduced by the Finance (No. 2) Act, 1980 had been challenged before the Supreme Court and its operation had been stayed in the related matter. In that situation, the alleged conflict between the Tribunal's earlier order and the amended provision could not be treated as a mistake of law apparent from the record for the purpose of rectification.

Conclusion: The rectification application was not maintainable and was rejected.

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