Appeal before Tribunal: Rectification of mistake: Section 254(2): A. Y. 1996-97: Application for rectification: Period of limitation commences from the date of receipt of the order and not the date of the order:

The assessee had received the order of the Tribunal dated 20-02-2007 on 19-11-2008. The assessee made an application for rectification u/s. 254(2) of the Incometax Act, 1961 on 09-05-2012. The Tribunal dismissed the application on the ground that the same is barred by limitation u/s. 254(2) as the application has been made beyond the period of four years from the date of the order.

The Gujarat High Court allowed a writ petition filed by the assessee and held as under:

“i) Section 254(2) of the Income-tax Act, 1961, 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 s/s. (1).

ii) Under the second part, the reference is to the amendment of the order when the mistake is brought to its notice by the assessee or the Assessing Officer. The statute has conferred the right in favour of the assessee or even the Revenue to prefer a rectification application within a period of four years and, therefore, even if a rectification application/ miscellaneous application is submitted on the last day of completion of four years from the date of receipt of the order, which is sought to be rectified, it is required to be decided on merits and in such a situation the assessee is not required to give any explanation for the period between the actual date of receipt of the order, which is sought to be rectified and the date on which the miscellaneous application is submitted.

iii) The order of the Tribunal sought to be rectified was received by the assessee on 19-11-2007. The assessee preferred the application on 09-05-2012. The application was not barred by limitation.”