A binding decision that covers my point was never considered when my order was passed. Is that a mistake apparent from the record?
Yes. The Supreme Court held that non-consideration of a decision of the jurisdictional High Court or of the Supreme Court can be a mistake apparent from the record, and upheld the Tribunal recalling its own order on that ground. The section actually applied was s.254(2); the same test - patent, manifest and self-evident - is the one used under s.154.
Decided by the Supreme Court (Supreme Court of India - C.K. Thakker and Lokeshwar Singh Panta, JJ. (judgment delivered by C.K. Thakker, J.)) on 2008-09-15, reported as [2008] 173 Taxman 322 (SC)/[2008] 305 ITR 227 (SC)/[2008] 219 CTR 90 (SC); Civil Appeal No. 1171 of 2004, affirming Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2003] 262 ITR 146/130 Taxman 360 (Guj.). It bears on section 254(2), section 154, section 11, section 12A of the Income Tax Act 1961, in Assessment & Scrutiny, Appeals and How Tax Law Is Read matters.
It is the authority for the one rectification ground that is not arithmetic: the order overlooked binding authority. That is worth more than an appeal in a small matter, because it costs nothing and does not put the rest of the assessment at risk. The department's answer is Volkart Brothers - that the point needs a long drawn process of reasoning and is therefore debatable - so the argument has to be that the decision is binding, on the same question, and simply was not looked at.
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The assessee, a stock exchange recognised under the Securities Contracts (Regulation) Act and registered as a company under s.25 of the Companies Act, applied on 10 February 1992 for registration under s.12A. It filed a nil return on 29 October 1996 for assessment year 1996-97 claiming exemption under s.11 although not yet registered; the return was processed under s.143(1)(a). A s.154 notice of 7 November 1997 proposed to withdraw the exemption, and the Commissioner granted registration on 20 February 1998 subject to yearly examination of eligibility. The Assessing Officer rejected the s.11 claim on 3 December 1999, the Commissioner (Appeals) upheld him on 28 February 2000, and the Tribunal dismissed the appeal on 27 October 2000. On 13 November 2000 the assessee applied under s.254(2), saying the Gujarat High Court's decision in Hiralal Bhagwati v. CIT [2000] 246 ITR 188 - decided a few months before the Tribunal's order - had not been brought to the Tribunal's notice. The Tribunal allowed the application on 5 September 2001, recalled its order and directed re-hearing. The Revenue's writ petition was dismissed by the Gujarat High Court on 31 March 2003 and it appealed.
The Revenue's appeal was dismissed, parties to bear their own costs. Non-consideration of a decision of the jurisdictional High Court or of the Supreme Court is a mistake apparent from the record which the Tribunal may rectify under s.254(2); rectifying such a mistake is not the exercise of a power of review, which the Tribunal does not have. The Court also approved the Gujarat High Court's view in Suhrid Geigy that a point covered by a decision of the jurisdictional court rendered prior to or even subsequent to the order can be a mistake apparent from the record, and reasoned that a judicial decision acts retrospectively - judges do not make law, they discover it - so a later decision clarifies a legal position that was earlier not correctly understood. The Court expressly decided nothing on the merits: the Tribunal had merely recalled its order and directed re-hearing, and the appeal will now be heard afresh without being influenced by any observation in the Tribunal's order, the High Court's order or this judgment.
The Court separated the two situations in s.254(2): the Tribunal may rectify a mistake apparent from the record of its own motion within the statutory period, and it shall do so if the mistake is brought to its notice by the assessee or the Assessing Officer (paras 21-23). It accepted the Revenue's premise that the power of review is not inherent and must be conferred by law, applying Patel Narshi Thakershi, so if what the Tribunal had done was a review the order would have to be set aside (paras 25-29). It then worked through the meaning of a mistake apparent from the record, drawing on the certiorari cases - Hari Vishnu Kamath, Satyanarayan Laxminarayan Hegde and Syed Yakoob - and settled on this: a patent, manifest and self-evident error which does not require elaborate discussion of evidence or argument, which strikes on mere looking and does not need a long-drawn-out process of reasoning on points where two opinions are conceivable; if the view taken in the original order is one of the possible views, there is no such error (para 37). Applying that, non-consideration of a binding decision of the jurisdictional High Court or of this Court is such a mistake (para 40). It approved the Gujarat High Court in Suhrid Geigy, which had held that a point covered by a decision of the jurisdictional court rendered prior or even subsequent to the order could be rectified (para 41), and supported that with the Blackstonian view that a judicial decision operates retrospectively because judges discover rather than make law, prospective overruling since Golak Nath being the exception (paras 42-44). It added, on S. Nagaraj, that rectification stems from the principle that justice is above all and is exercised to remove error and disturb finality (paras 45-46). On the facts, Hiralal Bhagwati had been decided a few months before the Tribunal's order and was not brought to its attention, so no error of law or jurisdiction was committed (para 47).
The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a "mistake apparent from the record"? In our opinion, both - the Tribunal and the High Court - were right in holding that such a mistake can be said to be a "mistake apparent from the record" which could be rectified under section 254(2).
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Handle my notice → Ask a CA on WhatsAppYes. The Supreme Court held that non-consideration of a decision of the jurisdictional High Court or of the Supreme Court can be a mistake apparent from the record, and upheld the Tribunal recalling its own order on that ground. The section actually applied was s.254(2); the same test - patent, manifest and self-evident - is the one used under s.154. This was decided by the Supreme Court (Supreme Court of India - C.K. Thakker and Lokeshwar Singh Panta, JJ. (judgment delivered by C.K. Thakker, J.)) and bears on section 254(2), section 154, section 11, section 12A of the Income Tax Act 1961. It is reported as [2008] 173 Taxman 322 (SC)/[2008] 305 ITR 227 (SC)/[2008] 219 CTR 90 (SC); Civil Appeal No. 1171 of 2004, affirming Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2003] 262 ITR 146/130 Taxman 360 (Guj.). It is the authority for the one rectification ground that is not arithmetic: the order overlooked binding authority. That is worth more than an appeal in a small matter, because it costs nothing and does not put the rest of the assessment at risk. The department's answer is Volkart Brothers - that the point needs a long drawn process of reasoning and is therefore debatable - so the argument has to be that the decision is binding, on the same question, and simply was not looked at. If it applies to you, the first step is this: Identify the decision by citation and show it was binding on the officer - the jurisdictional High Court or the Supreme Court, not another High Court.
The assessee, a stock exchange recognised under the Securities Contracts (Regulation) Act and registered as a company under s.25 of the Companies Act, applied on 10 February 1992 for registration under s.12A. It filed a nil return on 29 October 1996 for assessment year 1996-97 claiming exemption under s.11 although not yet registered; the return was processed under s.143(1)(a). A s.154 notice of 7 November 1997 proposed to withdraw the exemption, and the Commissioner granted registration on 20 February 1998 subject to yearly examination of eligibility. The Assessing Officer rejected the s.11 claim on 3 December 1999, the Commissioner (Appeals) upheld him on 28 February 2000, and the Tribunal dismissed the appeal on 27 October 2000. On 13 November 2000 the assessee applied under s.254(2), saying the Gujarat High Court's decision in Hiralal Bhagwati v. CIT [2000] 246 ITR 188 - decided a few months before the Tribunal's order - had not been brought to the Tribunal's notice. The Tribunal allowed the application on 5 September 2001, recalled its order and directed re-hearing. The Revenue's writ petition was dismissed by the Gujarat High Court on 31 March 2003 and it appealed. The matter was decided on 2008-09-15 by the Supreme Court (Supreme Court of India - C.K. Thakker and Lokeshwar Singh Panta, JJ. (judgment delivered by C.K. Thakker, J.)). On those facts the Supreme Court held as follows. The Revenue's appeal was dismissed, parties to bear their own costs. Non-consideration of a decision of the jurisdictional High Court or of the Supreme Court is a mistake apparent from the record which the Tribunal may rectify under s.254(2); rectifying such a mistake is not the exercise of a power of review, which the Tribunal does not have. The Court also approved the Gujarat High Court's view in Suhrid Geigy that a point covered by a decision of the jurisdictional court rendered prior to or even subsequent to the order can be a mistake apparent from the record, and reasoned that a judicial decision acts retrospectively - judges do not make law, they discover it - so a later decision clarifies a legal position that was earlier not correctly understood. The Court expressly decided nothing on the merits: the Tribunal had merely recalled its order and directed re-hearing, and the appeal will now be heard afresh without being influenced by any observation in the Tribunal's order, the High Court's order or this judgment.
The Court separated the two situations in s.254(2): the Tribunal may rectify a mistake apparent from the record of its own motion within the statutory period, and it shall do so if the mistake is brought to its notice by the assessee or the Assessing Officer (paras 21-23). It accepted the Revenue's premise that the power of review is not inherent and must be conferred by law, applying Patel Narshi Thakershi, so if what the Tribunal had done was a review the order would have to be set aside (paras 25-29). It then worked through the meaning of a mistake apparent from the record, drawing on the certiorari cases - Hari Vishnu Kamath, Satyanarayan Laxminarayan Hegde and Syed Yakoob - and settled on this: a patent, manifest and self-evident error which does not require elaborate discussion of evidence or argument, which strikes on mere looking and does not need a long-drawn-out process of reasoning on points where two opinions are conceivable; if the view taken in the original order is one of the possible views, there is no such error (para 37). Applying that, non-consideration of a binding decision of the jurisdictional High Court or of this Court is such a mistake (para 40). It approved the Gujarat High Court in Suhrid Geigy, which had held that a point covered by a decision of the jurisdictional court rendered prior or even subsequent to the order could be rectified (para 41), and supported that with the Blackstonian view that a judicial decision operates retrospectively because judges discover rather than make law, prospective overruling since Golak Nath being the exception (paras 42-44). It added, on S. Nagaraj, that rectification stems from the principle that justice is above all and is exercised to remove error and disturb finality (paras 45-46). On the facts, Hiralal Bhagwati had been decided a few months before the Tribunal's order and was not brought to its attention, so no error of law or jurisdiction was committed (para 47). In the words reproduced by the source cited on this page: "The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a "mistake apparent from the record"? In our opinion, both - the Tribunal and the High Court - were right in holding that such a mistake can be said to be a "mistake apparent from the record" which could be rectified under section 254(2)." The decision followed or applied Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji [1971] 3 SCC 844 - followed and relied upon; the power of review is not inherent; Suhrid Geigy Ltd. v. Commissioner of Surtax [1999] 237 ITR 834/107 Taxman 347 (Guj.) - impliedly approved at para 41; Syed Yakoob v. K.S. Radhakrishnan AIR 1964 SC 477; Hari Vishnu Kamath v. Syed Ahmad Ishaque AIR 1955 SC 233; S. Nagaraj v. State of Karnataka 1993 Supp (4) SCC 595.
It was decided by the Supreme Court on 2008-09-15 and is reported as [2008] 173 Taxman 322 (SC)/[2008] 305 ITR 227 (SC)/[2008] 219 CTR 90 (SC); Civil Appeal No. 1171 of 2004, affirming Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2003] 262 ITR 146/130 Taxman 360 (Guj.). Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 254(2), section 154, section 11, section 12A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's appeal was dismissed, parties to bear their own costs. Non-consideration of a decision of the jurisdictional High Court or of the Supreme Court is a mistake apparent from the record which the Tribunal may rectify under s.254(2); rectifying such a mistake is not the exercise of a power of review, which the Tribunal does not have. The Court also approved the Gujarat High Court's view in Suhrid Geigy that a point covered by a decision of the jurisdictional court rendered prior to or even subsequent to the order can be a mistake apparent from the record, and reasoned that a judicial decision acts retrospectively - judges do not make law, they discover it - so a later decision clarifies a legal position that was earlier not correctly understood. The Court expressly decided nothing on the merits: the Tribunal had merely recalled its order and directed re-hearing, and the appeal will now be heard afresh without being influenced by any observation in the Tribunal's order, the High Court's order or this judgment. It arises in Assessment & Scrutiny, Appeals and How Tax Law Is Read matters, on section 254(2), section 154, section 11, section 12A of the Income Tax Act 1961, and was decided by Supreme Court of India - C.K. Thakker and Lokeshwar Singh Panta, JJ. (judgment delivered by C.K. Thakker, J.). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Show it was on the same question, not merely a case going the same way on different facts. Say in the application that the decision was not considered, and where it was on record, point to where. Watch the four-year limit in s.154(7), which this decision does not extend.
Still good law. Later treatment verified in an earlier pass and not disturbed. Positive application appears in the itatonline digests for Philips India Ltd. v. PCIT (2021) 323 CTR 992 / 208 DTR 211 (Cal)(HC) and Sharda Cropchem Ltd. v. DCIT (2019) 71 ITR 141 / 199 TTJ 960 (Mum)(Trib), both citing it for the proposition that non-consideration of a decision of the jurisdictional High Court or of the Supreme Court is a mistake apparent from the record; those are digest summaries, not full judgments. The Bombay High Court in Vaibhav Maruti Dombale v. Assistant Registrar, ITAT (2025) 481 ITR 103 / 178 taxmann.com 447 (Bom)(HC), 12 September 2025, treats the decision as authoritative but reads it as confined to a prior binding decision that was not noticed. That reading sits uneasily with para 41 of this judgment, where the Supreme Court approved the Gujarat High Court's holding in Suhrid Geigy that a decision rendered prior or even subsequent to the order could ground rectification, and with paras 42 to 44 on the retrospective operation of judicial decisions. Nothing overruling or doubting the decision was found. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The sentence previously quoted here was a digest's narrative summary, not the Court's language; the quotation now comes from para 40 of the judgment. Two points need correcting in how this decision has been described. First, it is not confined to a decision that already existed when the order was passed. At para 41 the Court approved the Gujarat High Court in Suhrid Geigy Ltd. v. Commissioner of Surtax [1999] 237 ITR 834, which held that a point covered by a decision of the jurisdictional court rendered prior or even subsequent to the order could be rectified, and at paras 42 to 44 it supported that with the retrospective operation of judicial decisions, prospective overruling being the exception. On its own facts Hiralal Bhagwati had been decided a few months before the Tribunal's order, so the subsequent-decision point was not necessary to the result - but the approval of Suhrid Geigy is express. Anyone relying on the Bombay High Court's later reading in Vaibhav Maruti Dombale, that this decision 'does not lay down that subsequent decisions can be basis for recall', should read para 41 first and form their own view. Second, the Court decided nothing on the merits and said so twice, at paras 18 and 49: the Tribunal had merely recalled its order and directed re-hearing, and the Tribunal was to decide afresh without being influenced by any observation in its own earlier order, the High Court's order or this judgment. The section as quoted in the judgment allowed rectification 'at any time, within four years from the date of the order'; that limit has since been changed, so check the current text before relying on it. The Court decided the rectification question only. It expressed no opinion on whether the assessee was entitled to exemption under s.11, and directed that the Tribunal decide that afresh uninfluenced by anything said in the case (paras 18, 49). It does not deal with a decision of a non-jurisdictional High Court. It does not decide the assessee's argument that 'mistake apparent from the record' in s.254(2) is wider than the corresponding expression in Order 47 Rule 1 CPC - it expressly declined to enter that question (para 38). And while it approved Suhrid Geigy on decisions rendered subsequently, its own facts involved a decision that already existed, so that approval was not necessary to the result. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's appeal was dismissed, parties to bear their own costs. Non-consideration of a decision of the jurisdictional High Court or of the Supreme Court is a mistake apparent from the record which the Tribunal may rectify under s.254(2); rectifying such a mistake is not the exercise of a power of review, which the Tribunal does not have. The Court also approved the Gujarat High Court's view in Suhrid Geigy that a point covered by a decision of the jurisdictional court rendered prior to or even subsequent to the order can be a mistake apparent from the record, and reasoned that a judicial decision acts retrospectively - judges do not make law, they discover it - so a later decision clarifies a legal position that was earlier not correctly understood. The Court expressly decided nothing on the merits: the Tribunal had merely recalled its order and directed re-hearing, and the appeal will now be heard afresh without being influenced by any observation in the Tribunal's order, the High Court's order or this judgment.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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The Tribunal recalled its whole order on my miscellaneous application. Will that recall survive?