In Brief
The Supreme Court set aside the High Court's judgment and a recall order passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had recalled its earlier order based on an assessee's application under Section 254(2) of the Income Tax Act and re-decided the case on merits. The Court held that Section 254(2) powers are limited to correcting apparent mistakes of record only, not re-hearing cases on merits. The ITAT exceeded its jurisdiction by re-visiting and re-deciding the substantive appeal instead of merely rectifying errors. The original ITAT order favouring the Revenue was restored, and the assessee was permitted to file an appeal before the High Court within six weeks without limitation objections.
The lawyer headnote and full judgment text are available to registered users.