Section 254(2) Applies Only for Rectification, Not for Order Recall: ITAT Ahmedabad

ITO Vs Neetaben Snehalkumar Patel (ITAT Ahmedabad)

The recent case of ITO Vs Neetaben Snehalkumar Patel before the ITAT Ahmedabad has raised significant legal questions regarding the applicability of Section 254(2) of the Income Tax Act. This provision, which pertains to rectification of mistakes apparent from records, was central to the debate whether it can also be invoked for recalling and reviewing orders.

In this case, the assessee filed a Miscellaneous Application seeking modification of the ITAT’s order dated 03.05.2024, concerning the assessment year 2014-15. The primary contentions revolved around two alleged mistakes in the order:

1. The treatment of shares as penny stocks.

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