Rectification confined to apparent record errors; fresh inquiry or debatable issues cannot justify reopening under section 154.

Section 154 rectification is confined to mistakes apparent from the existing assessment record and cannot be based on fresh inquiry, later-discovered facts, or a debatable issue. Where the rectification order does not show that the alleged error was self-evident from the original record, the power cannot be sustained. The Revenue also failed to establish from the assessment record that the liability for arrear rent had clearly not accrued in the relevant previous year. The rectification was held invalid, the orders below were quashed, and the original allowance of arrear rent was restored.

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Issues: Whether the rectification made under section 154 of the Income-tax Act was valid when the alleged error was said to arise only from facts and material not shown to have existed on the assessment record and when the allowability of arrear rent was otherwise debatable.

Analysis: Rectification under section 154 is confined to mistakes that are apparent from the existing record. A fresh inquiry or later discovery of facts cannot be used to create a rectifiable error. The order of rectification did not disclose the material on record at the time of the original assessment or explain how the alleged mistake was self-evident from that record. The appellate material relied upon to sustain the rectification was not shown to have formed part of the assessment record. On merits also, the Revenue failed to establish that the liability to pay arrear rent had unquestionably not accrued during the relevant previous year on the basis of the record before the assessing officer.

Conclusion: The rectification was invalid and the issue is decided in favour of the assessee.

Final Conclusion: The orders of the authorities below were quashed and the original allowance of the arrear rent was restored.

Ratio Decidendi: Section 154 can be invoked only for an obvious error already discernible from the existing assessment record, and it cannot be used to sustain a rectification based on fresh investigation, subsequently discovered facts, or a debatable issue.

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