Telangana HC Upholds ITAT’s Rejection of Section 254(2) Rectification Plea

Oakton Global Technology Service Centre (India) Private Limited Vs Income Tax Appellate Tribunal (Telangana High Court)

Telangana High Court Upholds ITAT’s Rejection of Rectification Application Under Section 254(2) of Income-tax Act

The Telangana High Court has reaffirmed the limited scope of rectification proceedings under Section 254(2) of the Income-tax Act, 1961, holding that the provision can only be invoked to correct mistakes apparent from the record and cannot be used as a mechanism to revisit or review the merits of an appellate order passed by the Income Tax Appellate Tribunal (ITAT).

The Court dismissed the writ petition filed by the assessee challenging the ITAT’s refusal to rectify its earlier appellate order, observing that substantive grievances regarding alleged legal errors must be pursued through the appellate process and not through rectification proceedings.

Introduction

In Oakton Global Technology Service Centre (India) Private Limited vs Income Tax Appellate Tribunal & Another, the Telangana High Court examined the scope of rectification powers vested in the ITAT under Section 254(2) of the Income-tax Act.

The petitioner contended that while deciding the appeal for Assessment Year 2012-13, the ITAT had failed to consider several judicial precedents cited by the assessee and therefore the appellate order required rectification.