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2017 (9) TMI 193 - HC - Income TaxTribunal limited power of rectification u/s 254 - AO had never made addition on the ground of disallowance of purchases made by the assessee but the addition was based on Section 69 on the ground that the assessee had made unexplained investment in the form of stock - lapse of 3˝ years by the department for filing rectification application - Tribunal limited power of rectification under section 254 - Held that:- Under section 254 of the Act, an aggrieved party can approach the Tribunal within four years from the date of the order seeking rectification of an error apparent on the record. We may, therefore, not base our order on the Tribunal’s first observation regarding the department having allowed a delay of nearly 3˝ years to lapse before filing application for rectification. If the department was within the limitation in applying for rectification and if otherwise had made out a good ground for rectification, the Tribunal ought to have considered the same. On the merits of the order of the Tribunal, we are broadly in agreement with the view of the Tribunal that its earlier order did not call for rectification. It is well settled that the power of rectification are limited to correcting errors apparent on the record and cannot be equated with review powers. In the first round, the Tribunal was apprised of the controversy, rival stands and the findings of the Assessing Officer and the CIT(Appeals). The Tribunal gave a certain verdict which may have aggrieved the department and may have also given rise to an arguable legal point. Nevertheless, that by itself would not enable the department to activate the rectification powers of the Tribunal. Such powers are etched with serious limitations and cannot be exercised by way of appellate or review powers. There was nothing in the application of the department to point out an error in the order of the Tribunal which could have been rectified under exercise of powers under section 254 of the Act. Petition dismissed.
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