Rectification of apparent record mistakes allowed for overlooked jewellery credits and surrendered income, but no correction for simultaneous search finding.

Section 254(2) permits rectification only of a mistake apparent from the record, not a review or detailed reappraisal of evidence. The Tribunal treated mistaken assumptions already reflected in the record as rectifiable, including overlooked or misunderstood material on jewellery disclosed in the wealth-tax return, jewellery found on Shri Anand, jewellery received under the will of late Smt. Rajshree Jethwani, and surrender reflected in the firm's case, and it allowed the corresponding credits while deleting related additions. It declined rectification on the factual observation that the search and surrender occurred simultaneously, finding no error in that statement.

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Issues: (i) whether the Tribunal could rectify mistakes apparent from the record under section 254(2) of the Income-tax Act, 1961, including mistakes relating to credit for jewellery disclosed in the wealth-tax return, jewellery inventoried on the person of Shri Anand, jewellery received under the will of late Smt. Rajshree Jethwani, and credit for surrender made in the firm's case; (ii) whether the observation that the search and surrender were made simultaneously constituted a rectifiable mistake.

Issue (i): Whether the Tribunal could rectify mistakes apparent from the record under section 254(2) of the Income-tax Act, 1961, including mistakes relating to credit for jewellery disclosed in the wealth-tax return, jewellery inventoried on the person of Shri Anand, jewellery received under the will of late Smt. Rajshree Jethwani, and credit for surrender made in the firm's case.

Analysis: The Tribunal held that section 254(2) permits rectification of a mistake that is prima facie apparent from the record, but does not confer power of review. A mistake that is established from the existing record and does not require long-drawn reasoning is rectifiable. On the record, the Tribunal found that its earlier assumptions were incorrect in relation to the jewellery disclosed in the wealth-tax return, the jewellery found on the person of Shri Anand, the jewellery received through the will of late Smt. Rajshree Jethwani, and the surrender made in the firm's assessment. In each of these matters, the relevant material had been overlooked or misunderstood and the earlier conclusions rested on mistaken assumptions.

Conclusion: The objections on these points were accepted and the order was rectified by allowing the corresponding credits and deleting the related additions.

Issue (ii): Whether the observation that the search and surrender were made simultaneously constituted a rectifiable mistake.

Analysis: The Tribunal found no error in the observation that the search at the business premises of the firm and the residential premises of the partners took place simultaneously and that the surrender was also made simultaneously. That factual statement was held to be correct and did not call for rectification.

Conclusion: Rectification was refused on this point.

Final Conclusion: The miscellaneous application succeeded in part, with rectification granted on the substantive mistaken assumptions relating to jewellery credits and surrendered income, while one alleged error was declined.

Ratio Decidendi: A mistake is rectifiable under section 254(2) only when it is apparent from the record and does not require a review or a detailed reappraisal of evidence; an order based on an obvious mistaken assumption drawn from material already on record can be corrected.

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