Appellate Tribunal : Power u/s.254(2) : Power to recall order : No absolute prohibition : Prejudice caused to party by mistake to be seen

“(i) In CIT v. Honda
Siel Power Products Ltd., 293 ITR 132 (Del.), the High Court considered the

contention that the recall of the Tribunal’s entire decision was prohibited
on the basis that in the garb of rectification, the order cannot be
recalled. The application for rectification was filed as the Tribunal had
not taken note of a binding precedent, though it was cited before the
Tribunal. In that factual background, the Supreme Court held that the power
of rectification has been conferred on the Tribunal to see that no prejudice
is caused to either of the parties appearing before it by its decision based
on a mistake apparent on record and that atonement to the wronged party by
the Court or the Tribunal for the wrong committed by it has nothing to do
with the inherent power to review. The Court took note of the fact that the
Tribunal committed a mistake in not considering material which was already
on record and the Tribunal acknowledged its mistake and accordingly
rectified its order.

(ii) The decision of the
Supreme Court in Honda Siel Power Products Ltd. v. CIT, 295 ITR 466 (SC) is
an authority for the proposition that the Tribunal in certain circumstances
can recall its own order and S. 254(2) of the Act does not totally prohibit
so. Decisions which lay down the principle that the Tribunal under no circumstances can recall its order in entirety do not lay down the correct statement of law.

(iii) The Tribunal,
while exercising the power of rectification u/s.254(2) of the Act, can
recall its order in entirety if it is satisfied that prejudice has resulted
to the party which is attributable to the Tribunal’s mistake, error or
omission and which error is a manifest error and it has nothing to do with
the doctrine or concept of inherent power of review.”