Rectification under section 154 cannot revisit a debatable factual issue already examined in scrutiny assessment.

Rectification under section 154 cannot be used to make a fresh factual determination where the issue was already examined in a completed section 143(3) assessment. On the facts, the proposed addition of a sum treated by the Revenue as commission income required reappraisal of the material and was not a mistake apparent from the record. The assessee's explanation that the amount was an advance on which tax had been deducted at source further supported deletion of the addition.

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Issues: Whether the addition of Rs. 3,00,000 could be sustained in rectification proceedings under section 154 of the Income-tax Act, 1961, when the relevant material had already been examined in the original assessment under section 143(3).

Analysis: The return was scrutinised and the assessment was completed under section 143(3) after examination of the details furnished by the assessee. The attempted addition arose from an audit objection and related to the characterisation of a sum of Rs. 3,00,000 as commission income allegedly omitted from tax. The disputed question required fresh adjudication on facts and could not be treated as a mistake apparent from the record for the purpose of section 154. The assessee had also explained in the rectification proceedings that the amount represented an advance on which tax had been deducted at source.

Conclusion: The addition of Rs. 3,00,000 was not sustainable in rectification proceedings and was directed to be deleted, in favour of the assessee.

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