PCIT Vs Chandramouli (Karnataka High Court)
Tax Tribunal Orders Final: Subsequent SC Judgment Cannot Trigger Sec. 254(2) Review; No Rectification for Changed Law: ITAT Order Final Despite Subsequent SC Ruling; SC Ruling No Ground for ITAT Rectification: HC on Scope of Sec. 254(2)
Revenue filed this writ petition u/Art. 226 & 227 challenging the ITAT’s order dt 26.05.2023 in M.P. No.98/Bang/2023 (in ITA No.3/Bang/2022), which had rejected Revenue’s miscellaneous petition seeking rectification u/s 254(2). Revenue contended that in view of the later Supreme Court ruling in Checkmate Services Pvt. Ltd. (2023) 6 SCC 451, the Tribunal’s earlier decision allowing the Assessee’s claim under Section 36(1)(va) ought to have been rectified.
Justice S.R. Krishna Kumar, after hearing the Department, observed that the issue is squarely covered by the recent Coordinate Bench ruling in DCIT v. OT Privacy Software Pvt. Ltd., W.P. No.12837/2024, dt 15.09.2025, which had in turn followed DCIT v. Brush Tech India (WP No.27089/2023, dt 30.07.2025).
Relying on those rulings & the decisions in Beghar Foundation v. K.S. Puttaswamy (2021) 3 SCC 1 & Sanjay Kumar Agrawal v. State Tax Officer (2024) 2 SCC 362, the Court reiterated that:
“A subsequent change in law or a later decision of a larger Bench cannot constitute a ground for review or rectification. Section 254(2) can be invoked only for mistakes apparent from the record as it existed when the order was passed.”
