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TMI Blog2002 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... the other co-debtor, and Shri Sahni, the assessee before us. This seems to be a case of mistake of both of facts and law and this is a case in which the ratio of the decision of the Punjab High Court in the case of Mangat Ram Kuthiala v. CIT [1960] 38 ITR 1 would directly apply. Both the sides have referred to mistakes as mistakes apparent from the record. In the interest of justice we consider that it would be fair and reasonable to recall our order dated July 28, 1978, and refix the appeals for further hearing of both sides for ascertaining true and correct facts. We order accordingly. The order dated July 28, 1978, stands recalled. The appeals shall be posted for further hearing at an early date." Mr. Anoop Sharma, learned counsel appearing on behalf of the petitioner, would contend that the Tribunal has no power of review and while exercising its jurisdiction under section 254 of the Income-tax Act it could not have recalled the order which was passed on the merits. In support of the said contention, reliance has been placed on Deeksha Suri (Ms.) v. Income-tax Appellate Tribunal [1998] 232 ITR 395 (Delhi); CIT v. Ideal Engineers [2001] 251 ITR 743 (AP); CIT v. K.L. Bhatia [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered to be endowed with such ancillary or incidental powers as are necessary to discharge its functions effectively for the purpose of doing justice between the parties. In a case of this nature, we are of the view that the Tribunal should be considered as invested with such incidental or ancillary powers unless there is any indication in the statute to the contrary. We do not find any such statutory prohibition. On the other hand, there are indications to the contrary." Interpretation of section 254(2) of the Act came up for consideration in various decisions. In K.L. Bhatia's case [1990] 182 ITR 361 (Delhi), Kirpal J. as his Lordship then was, held: "As we have already observed, the Tribunal is a creation of the statute. It is an admitted case, and it is now well-settled, that though the Tribunal has no inherent power of reviewing its order on merits, the Tribunal has incidental or ancillary powers which can be exercised by it. But such power cannot be invoked to rehear a case on merits. The Tribunal can, after disposing of the appeal under section 254(1), rehear the matter on merits only within the purview of section 254(2). The Supreme Court has held in Patel Narshi Thake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws that it does not empower the Tribunal to review its own order and recall its earlier order." In the case of CIT v. Ideal Engineers [2001] 251 ITR 743, a Division Bench of the Andhra Pradesh High Court, inter alia, observed that the Tribunal by recalling an order passed on the merits has taken away a vested right, which could not be done. Yet again in CIT v. Prahlad Rai Todi [2001] 251 ITR 833, a Division Bench of the Gauhati High Court observed that the power of the Tribunal under section 254(2) is wider than the power conferred upon a civil court under section 152 of the Code of Civil Procedure, 1908, but held that the said power is limited following the decision of this court in CIT v. K.L. Bhatia [1990] 182 ITR 361 (Delhi). In Smt. Baljeet Jolly v. CIT [2001] 250 ITR 113 (Delhi), Pasayat C.J. as his Lordship then was, held: "A mistake which can be rectified under section 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. The language used in section 254(2) makes it clear that only amendment to the order passed under section 254(1) is permissible where it is brought to the notice of the Tribunal that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the mistake. If the mistake is one which requires determination of some undecided issue because it has not been decided though raised, the procedure that would follow the discovery of such mistakes is to recall the order, and decide the case afresh or to decide that issue after affording an opportunity of hearing the parties concerned and pass a fresh order in the light of finding on such issue. The order under section 254(2) is not confined to arithmetical or clerical mistake, nor only to correct substantive mistakes but also procedural mistakes... While it is true that the power of rectification of an order is far narrower than the power to review generally, the methodology of rectifying the order when mistake apparent from the record is found, may be to correct a mistake in the substantive aspect of the order as well as mistake in the procedural aspect of making order. Recalling of an order for correcting an apparent mistake in the procedural aspect cannot be equated with review. For illustration purposes, if from the record it appears that one of the parties has not at all been heard and the order has been made in breach of the principles of natural justice going to root of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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