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Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment year 1989-90 - Assessee filed a rectification application before Tribunal on 2-8-2000, praying for recall of its own order dated 9-12-1996 - Tribunal allowed rectification application by order dated 31-1-2003 - On revenue's appeal, High Court held that under section 254(2), Tribunal could not have allowed rectification beyond four years - Whether since application for rectification was filed within four years and it was Tribunal, which took its own time to dispose of application, High Court had erred in holding that application could not have been entertained by Tribunal beyond four years - Held, yes FACTS For the relevant assessment year, the assessment of the assessee was framed by determining taxable income under section 115J. On appeal, the Commissioner (Appeals) and the Tribunal, by order dated 9-12-1996, upheld computation of income under section 115J. On 2-8-2000, the assessee filed application praying for recall of the Tribunal's order dated 9-12-1996. The Tribunal allowed the rectification application on 31-1-2003. On the revenue's appeal, the High Court held that under section 254(2), the Tribunal could not have allowed rectification beyond four years and, it therefore, set aside the Tribunal's order on the ground of limitation without going into the merits. On appeal to the Supreme Court : HELD Section 254(2) is in two parts. Under the first part, the Tribunal may, at any time within four years from the date of the order, rectify any mistake apparent from the record and amend any order passed by it under sub-section (1). Under the second part of section 254(2), reference is to the amendment of the order passed by the Tribunal under sub-section (1) when the mistake is brought to its notice by the assessee or the Assessing Officer. Therefore, in short, the first part of section 254(2) refers to suo motu exercise of the power of rectification by the Tribunal whereas the second part refers to rectification and amendment on an application being made by the Assessing Officer or the assessee pointing out the mistake apparent from the record. In the instant case,…

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