Rectification under the Income Tax Act is confined to mistakes apparent from the record and not mere discrepancies in legal opinions.

1. The Income Tax Appellate Tribunal has referred to this Court the following questions of law, under S.256(1) of the Income Tax Act, 1963. (for short 'the Act'). Adjudication relates to the assessment year 1982-83.
1) "Whether on the facts and in the circumstances of the case the Appellate Tribunal was justified in holding that there was a mistake in the appellate order which required rectification on the ground that there was disparity on a point between the impugned order and another order of the Appellate Tribunal?
2) Whether there were materials for the Appellate Tribunal to interfere with the order of the CIT (Appeals) and re - determine the quantum of penalty?
3) Whether the Appellate Tribunal was right in directing the assessing officer not to follow the decision of the Indore Bench of the Tribunal in the case of Ramlal Chiranjilal v. ITO which held that the quantum of penalty is to be computed in relation to the total income as finally determined?"

2. The assessee filed the return of income for the assessment year 1982-83 only on 14/08/1986. Due to the delay in filing the return, the assessing officer, after rejecting the explanation offered by the assessee, imposed Rs.4,78,768/- as a penalty under S.271(1) (a) of the Act. On appeal, it was held that there was delay of only five months in filing the return since the period prior to the filing of return had been properly explained. The appeal was thus partly allowed and the assessing officer was directed to determine the quantum of penalty in the light of the directions given by the Income Tax Appellate Tribunal (Indore Bench) in the case of Ramlal Chiranjilal v. ITO, (1992) 107 Taxation 1 (Trib.).

3. Revenue appealed to the Appellate Tribunal. By order dated 25/11/1997 the Tribunal confirmed the order of CIT(Appeals) and dismissed the appeal and reiterated to determine the quantum of penalty leviable on the assessee in the light of the directions given in Ramlal Chiranjilal's case (supra).

4. A petition for rectification under S.254(2) of the Act was filed by the Department contending that the decision in Ramlal Chiranjilal's case was not applicable and the direction to follow the said decision case was incorrect, since the Tribunal had, in a case relating to a sister concern of the assessee, decided not to follow Ramlal Chiranjilal's case. On the aforesaid basis, the Tribunal allowed the petition for rectification. This reference arises under the aforesaid circumstances.

5. The primary question that requires consideration is whether, in the facts that arose before the Tribunal, the circumstances warranted a rectification under S.254(1) of the Act.

6. We have heard Sri. Bobby John Pulickaparambil learned counsel for the assessee as well as Sri. P. K. Raveendranatha Menon learned Senior Counsel for the department.

7. S.254(1) & (2) of the Act as it then stood, is as follows:
254. Orders of Appellate Tribunal. - (1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.
(2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer.

8. A perusal of the above extracted provision makes it explicit that the power to rectify an order can be exercised only if there is a 'mistake apparent from the record'. The power of rectification is not akin to that of