Non-Adjudication of Grounds Is Rectifiable Mistake Under Section 254(2) | ITAT

Case Details: Dheeraj Tolaram Talreja vs. Income-tax Officer [2026] 183 taxmann.com 551 (Mumbai-Trib.)

Judiciary and Counsel Details

• Amit Shukla, Judicial Member & Girish Agrawal, Accountant Member
• Nikhil Tiwari for the Appellant.
• Krishna Kumar, Sr. DR for the Respondent.

Facts of the Case

The assessee’s appeal for the relevant assessment year was disposed of by the Tribunal, wherein issues relating to the determination of residential status, taxability of income from house property situated in Singapore and proportionate Singapore salary income, and allowability of foreign tax credit were considered in the course of recording facts, submissions, and legal contentions.

However, the Tribunal did not render a categorical finding on residential status, and consequently, the grounds for the taxability of house property income and proportionate salary income also remained unadjudicated. Further, although the Tribunal recorded observations regarding the inadmissibility of denying foreign tax credit merely for delay in filing Form No. 67, the matter was remanded to the Assessing Officer without clear and consistent findings in principle.

In these circumstances, the assessee filed a Miscellaneous Application under section 254(2) seeking rectification of mistakes apparent from the record in the Tribunal’s earlier order for the said assessment year.

ITAT Held

The Mumbai Tribunal held that the power of rectification conferred upon the Tribunal is a limited power, intended to correct mistakes which are patent, manifest and apparent from the record, and does not extend to review of the order or reappreciation of evidence on merits.

At the same time, it is equally well-settled that failure to adjudicate a ground raised before the Tribunal, or inconsistency between the findings recorded and the operative directions issued, constitutes a mistake apparent from the record, amenable to rectification under section 254(2).In the present case, it is evident that the Tribunal has elaborately recorded the factual background relating to the residential status of the assessee, including the period of stay in India, the applicability of section 6(6), and the assessee’s contention that he qualifies as a Resident but Not Ordinarily Resident (RNOR).

The Tribunal has also taken note of the fact that the assessee had initially filed the return treating himself as Resident and Ordinarily Resident (ROR), which was subsequently revised upon discovering the error, and that relevant documentary evidence, including passport copies and a summary of stay days, formed part of the record. However, despite recording the aforesaid factual matrix and submissions, no categorical finding has been rendered by the Tribunal on the ground relating to the determination of the correct residential status of the assessee for the assessment year under consideration.

Once the facts and legal submissions on an issue are noticed in the order, the absence of a finding thereon results in a clear omission apparent from the record. The Tribunal is duty-bound to adjudicate each ground raised before it, and non-adjudication of a ground constitutes a rectifiable mistake within the meaning of section 254(2).

Consequently, Grounds raised by the assessee, which pertain to the non-chargeability of income from house property situated in Singapore and the proportionate salary income from Singapore, also remain unadjudicated. These grounds are intrinsically and inseparably linked to the determination of residential status and were specifically raised, argued and supported by material on record, including detailed computations forming part of the factual paper book. The omission to render findings on these consequential grounds, which flow directly from earlier Ground, is equally apparent from the record and requires rectification.

Further, the matter was remanded to the Assessing Officer without recording a clear and consistent finding on the nature of Form No. 67 or the allowability of foreign tax credit in principle. This has resulted in an internal inconsistency between the reasoning recorded in the body of the order and the operative directions issued. Such inconsistency, being manifest on the face of the record, constitutes a mistake apparent from the record and is amenable to rectification under section 254(2).