Apparent errors in applying precedent permit rectification and fresh consideration of dividend distribution tax in book-profit computation.

An apparent error arising from non-consideration or incorrect treatment of applicable judicial precedent may be rectified under the Tribunal's statutory rectification jurisdiction where it prejudices a party. The notes state that an incorrect observation and inadequate consideration of precedent on dividend distribution tax in computing book profits warranted recall of the finding on Ground No. 9 for fresh adjudication. They also state that limitation for a miscellaneous application is computed from communication and service of the Tribunal's order; the application was treated as filed within the prescribed period from receipt of the order. Ground No. 9 was restored for reconsideration after notice to the parties.

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Issues: (i) Whether the delay in filing the miscellaneous application was liable to be condoned; (ii) whether non-consideration and incorrect treatment of applicable judicial precedents constituted a mistake apparent from the record warranting recall of the finding on Ground No. 9.

Issue (i): Whether the delay in filing the miscellaneous application was liable to be condoned.

Analysis: The limitation period was reckoned from the date on which the tribunal order was communicated and served, rather than from the date of the order. The application was filed within six months from the end of the month in which the order was received.

Conclusion: The delay of 120 days was condoned.

Issue (ii): Whether non-consideration and incorrect treatment of applicable judicial precedents constituted a mistake apparent from the record warranting recall of the finding on Ground No. 9.

Analysis: The tribunal had adopted the reasoning of a coordinate bench but recorded an incorrect observation and failed to properly consider the applicable precedent concerning the treatment of dividend distribution tax in the computation of book profits. Such an error was apparent from the record and caused prejudice requiring rectification under the tribunal's statutory rectification jurisdiction.

Conclusion: The finding on Ground No. 9 was recalled for fresh adjudication in light of the applicable coordinate-bench decision.

Final Conclusion: The miscellaneous application resulted in restoration of Ground No. 9 for reconsideration after appropriate notice to the parties.

Ratio Decidendi: A tribunal must rectify under Section 254(2) an apparent error arising from non-consideration or incorrect treatment of a binding judicial precedent where the error prejudices a party.

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