Rectification under section 154 covers an inadvertent return error where supporting records show the correct acquisition date for capital gains.

An inadvertent wrong date selection in Schedule 112A affecting long-term capital gains computation was held rectifiable under section 154 because the relevant "record" extends beyond the impugned intimation and includes material available to the Assessing Officer. The assessee had evidence that the mutual fund units were acquired before the cut-off date, so the error in the return was an apparent mistake supported by the record. Rectification was therefore maintainable, and the Assessing Officer was required to recompute the capital gains on verification of the correct acquisition date.

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Issues: Whether an inadvertent wrong selection in the return of income affecting the computation of long-term capital gains could be rectified under section 154 of the Income-tax Act, 1961, when the supporting material showed that the assets were acquired before the relevant cut-off date.

Analysis: The Tribunal held that the expression "record" for the purpose of section 154 is not confined narrowly to the impugned intimation or order, but includes the material available to the Assessing Officer relating to the assessee. On the facts, the assessee produced evidence showing that the mutual fund units were acquired before the cut-off date, and the wrong date selection in Schedule 112A was an inadvertent error resulting in an incorrect computation of capital gains. Since the mistake was apparent from the return and the supporting record, rectification was warranted and the Assessing Officer was required to recompute the capital gains on the basis of the correct acquisition date.

Conclusion: The rectification application was maintainable and the assessee succeeded on the point that the apparent mistake in the return could be corrected under section 154, with a direction for recomputation of capital gains on verification of evidence.

Ratio Decidendi: For rectification under section 154 of the Income-tax Act, 1961, the relevant "record" is not limited to the assessment intimation alone and an obvious clerical or inadvertent error in the return itself, when supported by the material on record, can be corrected as a mistake apparent from the record.

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