Rectification under section 154 fails where the alleged error turns on a debatable issue, not an apparent record mistake.

Rectification under section 154 of the Income-tax Act is unavailable where the alleged mistake depends on a debatable issue and is not an error apparent on the face of the record. The existence of divergent High Court views on the principal question showed that the matter was subject to judicial debate, so it could not be corrected by rectification. The Supreme Court declined to express any opinion on the merits of the underlying issue and held that the revenue appeals failed because the rectification order was unsustainable.

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Issues: Whether the assessing authority could invoke rectification under section 154 of the Income-tax Act, 1961 when the underlying question was debatable.

Analysis: The existence of divergent views among the judges of the High Court on the principal question showed that the matter was not free from debate. A point on which judicial opinion differed could not be treated as an error apparent on the face of the record for the purpose of rectification under section 154. The Court expressly declined to express any opinion on the merits of the principal issue.

Conclusion: Section 154 could not be invoked to cancel the allowance, as no rectifiable error apparent on the face of the record was shown.

Final Conclusion: The revenue appeals failed because the rectification order was unsustainable on the ground that the issue was debatable.

Ratio Decidendi: Rectification under section 154 is impermissible where the alleged error depends on a debatable question and is not an error apparent on the face of the record.

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