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2012 (9) TMI 266 - HC - Income TaxRectification of mistake u/s 254 - Disallowance of commission paid to dealers - ITAT allowed it - rectification application by assessee accepted on drastic disallowance to the extent of 10% for two succeeding assessment years i.e 2005-06 and 2006-07 - Held that:- Section 254(2) of the Act makes it amply clear that a 'mistake apparent from the record' is rectifiable. To attract the jurisdiction under Section 254(2), a mistake should exist and must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. Considering the legal position, the Tribunal was not justified in recalling the order passed by it in toto and setting the matter down for a fresh hearing - whether the dealer commissions remained constant throughout the previous years, or had to dwindle, according to the Tribunal’s understanding in its previous order of 30-11-2009, were matters that had to be gone into and were directed to be gone into by the AO. However, in the order by which previous order was rectified, the entire basis of its previous reasoning was substituted, and a wholly new result ensued. This court is clear that such re-appreciation did not amount to rectification of a mistake, but re-appreciation of a process of reasoning, which falls legitimately in the sphere of the appellate forum - As Tribunal took note of its order dated 9-10-2009 in respect of the AY 2005-06, and was to quite an extent influenced by it but is to be noted that the correctness of that order is under appeal before this court - thus the Tribunal could have not entirely substituted and re-written its previous order - the main order disposing of the matter on 30-11-2009 is hereby restored.
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