Law:

Section:

Section 254(2) of the Income-tax Act, 1961 - Appellate Tribunal - Rectification of mistake - Whether a mistake discovered in an order from basis of a subsequent of High Court can be a mistake apparent from record and a ground for rectification - Held, yes - Whether subsequent decision of High Court should, however, in such cases, be directly in point - Held, yes Facts For the assessment year 1971-72, the assessee filed a return showing a net loss of Rs. 73,886. The ITO, however, computed the net loss at Rs. 32,519. The ITO held that the assessee had concealed the particulars of income and penalty proceedings were, therefore, initiated against the assessee under section 271(1)(c). After taking into consideration the explanation of the assessee, the ITO held that as the assessee had concealed the particulars of its income to the extent of Rs. 13,000, the minimum penalty leviable was Rs. 13,000. The ITO accordingly levied the minimum penalty of Rs. 13,000 on the assessee. The Tribunal upheld the ITO's order. Thereafter, the assessee submitted an application before the Tribunal for rectification. The contention urged on behalf of the assessee was that in view of the decision of this Court in CIT v. Jaora Oil Mill [1981] 129 ITR 423, which was decided subsequent to the decision of the Tribunal, the order passed by the Tribunal deserved to be rectified as there was a mistake apparent on the face of the record. This contention was not upheld by the Tribunal and it was held that there was no mistake or error apparent from the record. On reference: Held It may be that in the circumstances of a given case, a mistake discovered in an order on the basis of a subsequent of the High Court may be a mistake apparent on the record and a ground for rectification but the subsequent decision of the High Court should in such cases, be directly on point. As held by the Supreme Court in State of Orissa v. Sudhansu Sekhar Misra AIR 1968 SC 647, a decision is only an authority for what it actually decides and what is of the essence in a decision is its ratio and not what logically follows from the various observations made in it. In Jaora Oil Mill's case (supra), it was found that the…

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