Rectification under section 254(2) turns on timely filing, and later disposal does not invalidate the application.

A rectification application under section 254(2) is governed by the date of filing, not the date on which the Tribunal passes the rectification order. If the application is moved within four years from the order sought to be rectified, the proceeding is validly initiated and cannot be defeated by delay in disposal by the Tribunal. The same approach was applied by analogy to the old income-tax rectification scheme. A timely application therefore remains effective even if the final order is made after expiry of the four-year period.

---

---

Issues: Whether a rectification application under section 254(2) of the Income-tax Act, 1961 is barred if the Tribunal passes the rectification order after four years from the date of the original order, despite the application having been filed within time.

Analysis: The decisive factor under section 254(2) is the filing of the application bringing the mistake to the Tribunal's notice within four years from the date of the order sought to be rectified. The statutory limit governs the initiation of rectification proceedings, not the date on which the Tribunal actually disposes of the application. The same principle was applied by analogy to the rectification scheme under the old income-tax law, and the delay of the authority in passing the order cannot defeat a timely application. The authorities relied upon by the assessee were held not to support the proposition that the Tribunal could treat a timely application as ineffective merely because the final order was made later.

Conclusion: The assessee's objection that the earlier rectification order was time-barred was rejected. The Tribunal held that the rectification application was validly entertained and the later order was not invalid merely because it was passed after expiry of four years.

---