Rectification under section 254(2) is confined to apparent mistakes and cannot be used to revisit merits already decided.

Rectification under section 254(2) of the Income-tax Act is limited to mistakes apparent from the record and cannot be used to reopen concluded findings. The Tribunal held that the claims concerning mobilisation expenses for NRI deposits, deduction under section 36(1)(viia), and interest paid to the head office and ANZ Bank, London all required reappraisal of facts or merits rather than correction of an obvious error. As the original order had already examined the material and arguments, no patent mistake was shown and rectification was refused.

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Issues: (i) whether the Tribunal could rectify its earlier order under section 254(2) of the Income-tax Act, 1961 in relation to the claim for expenses incurred for mobilisation of deposits from NRIs at Dubai; (ii) whether any mistake apparent on record existed in the Tribunal's findings regarding deduction under section 36(1)(viia) of the Income-tax Act, 1961; and (iii) whether the figures and conclusions relating to interest paid to the head office and to ANZ Bank, London required rectification under section 254(2) of the Income-tax Act, 1961.

Issue (i): Whether the Tribunal could rectify its earlier order under section 254(2) of the Income-tax Act, 1961 in relation to the claim for expenses incurred for mobilisation of deposits from NRIs at Dubai.

Analysis: The record showed that the original appeal had been considered at length and directions had been given on the allowability of the expenditure. The alleged factual error did not disclose any patent mistake apparent from the record, and the application sought reconsideration of the merits rather than correction of an obvious error.

Conclusion: No rectifiable mistake was found on this issue, and the claim failed.

Issue (ii): Whether any mistake apparent on record existed in the Tribunal's findings regarding deduction under section 36(1)(viia) of the Income-tax Act, 1961.

Analysis: The Tribunal found that the factual matrix, including the provision account movements and write-back, had already been examined in the original order. The application invited a reappraisal of the evidence and the conclusions drawn from it, which is impermissible under section 254(2). The provision in question had been considered on the basis of the records and arguments then available.

Conclusion: No mistake apparent on record was established, and rectification was refused.

Issue (iii): Whether the figures and conclusions relating to interest paid to the head office and to ANZ Bank, London required rectification under section 254(2) of the Income-tax Act, 1961.

Analysis: The Tribunal held that the payment figures urged in the miscellaneous application were not borne out by the material placed before it earlier. The original order had already addressed the nature of the payment and its tax treatment, and the present request amounted to a challenge to the merits of that conclusion. Section 254(2) does not confer power to review an order under the guise of rectification.

Conclusion: No apparent mistake was shown, and the request for correction was rejected.

Final Conclusion: The miscellaneous application did not disclose any patent error warranting rectification; the Tribunal reaffirmed that section 254(2) cannot be used to revisit concluded findings on facts or law.

Ratio Decidendi: Rectification under section 254(2) of the Income-tax Act, 1961 is confined to a mistake apparent on the record and cannot be used to obtain a review or re-adjudication of issues already decided on merits.

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