Rectification under section 154 depends on record-based facts; disputed contract terms require verification before applying later law.

Rectification under section 154 can be entertained on the basis of a later Supreme Court decision only if the relevant contract terms were already on the assessment record and the alleged mistake is apparent from that record. Where the existence or contents of the contracts are disputed, the issue becomes factual and cannot be resolved in rectification proceedings. The matter was therefore restored for fresh verification of whether the contracts formed part of the assessment record and for decision accordingly.

---

---

Issues: Whether the assessee's rectification application under section 154 of the Income-tax Act, 1961, based on a subsequent Supreme Court decision, disclosed a mistake apparent from the record and could be entertained.

Analysis: The application for rectification depended upon the terms of the contract under which materials were supplied by the departments and whether those contracts were already on record. If the contracts were available and their terms were similar to those considered by the Supreme Court, the later declaration of law could be applied in rectification proceedings. If the contracts were not on record, the matter would involve disputed facts and could not be decided under section 154. Since the factual position was in controversy, the proper course was to direct the Income-tax Officer to verify whether the contracts were part of the assessment record and then proceed accordingly.

Conclusion: The orders of the authorities below were set aside and the matter was restored to the file of the Income-tax Officer for fresh verification and decision.

---