MRS. AVAN NELUM GIDWANI ,MUMBAI vs. DY CIT, CENTRAL CIRCLE 3(3), MUMBAI

The learned counsel appearing on behalf of the assessee submitted that two mistakes apparent from the record have crept into the Tribunal’s order. Firstly, with regard to Ground No.4, it was pointed out that the assessee had specifically argued that the adjustment of Rs.5,21,93,081 on account of ICDS was made by the CPC without issuing any prior intimation or affording an opportunity of hearing as mandated under the first proviso to section 143(1)(a) of the Act. This legal contention was not only advanced during the course of hearing but was also recorded by the Tribunal in paragraph 5 of the order. Thereafter, detailed written submissions reiterating the said contention were also filed pursuant to the directions of the Bench. However, while disposing of Ground No.4 in paragraph 12 of the order, an

Secondly, with regard to Ground No.3 relating to the adjustment made on account of ICDS, the learned counsel submitted that the Tribunal proceeded on the footing that the impugned adjustment represented a disallowance of expenditure reflected in the Tax Audit Report. It was submitted that this factual premise is contrary to the material available on record, since the adjustment represented an increase in profit under clause 13(e) of the Tax Audit Report. It was further submitted that before the Tribunal the assessee had specifically relied upon the statutory amendment made by the Finance Act, 2021 introducing the expression “increase in income” in clause (iv) of section 143(1)(a), effective from Assessment Year 2021-22, besides placing reliance upon the Memorandum explaining the Finance Bill, 2021 and the Instructions issued for filing Form ITR-6 for Assessment Years 2020-21 and 2021-22 demonstrating that adjustment on account of ICDS discrepancy could be made under section 143(1)(a)(iv) only from Assessment Year 2021-22 onwards. It

The learned Departmental Representative relied upon the order of the Tribunal.

We have carefully considered the rival submissions and have also perused the Miscellaneous Application, the Tribunal’s order sought to be rectified and the material available on record. The jurisdiction under section 254(2) is undoubtedly confined to rectification of mistakes apparent from the record and does not extend to review of the order on merits. At the same time, it is equally well settled that where a contention specifically urged before the Tribunal, supported by written submissions forming part of the record, either remains unadjudicated or is omitted from consideration on account of an inadvertent factual error, the same constitutes a mistake apparent from the record capable of rectification under section 254(2).

On a careful examination of the record, we find considerable force in the contention advanced by the learned counsel. In paragraph 5 of the original order, the Tribunal itself has specifically recorded the legal contention raised on behalf of the assessee that the adjustment under section

We also find substance in the grievance of the assessee with regard to Ground No.3. The assessee had specifically raised a legal contention that the adjustment in question represented an increase in income arising from ICDS adjustment and that the statutory power to make such adjustment under clause (iv) of section 143(1)(a), by incorporating the expression “increase in income”, came into effect only from Assessment Year 2021-22 by virtue of the Finance Act, 2021. In support of the said contention, reliance

Having regard to the entirety of the facts and circumstances of the case, we are satisfied that the assessee has been able to demonstrate existence of mistakes apparent from the record within the meaning of section 254(2) of the Act. We accordingly recall our order dated 04.11.2025 to the limited extent of adjudication of Ground Nos.3 and 4 in the appeal. The appeal shall be fixed for hearing only on the aforesaid limited issues after due notice to both the parties. It is clarified that the findings recorded by us on all other issues in the order dated 04.11.2025 shall remain undisturbed.