Rectification under section 254(2) cannot be used to review or recall an appellate order; branch sales were not treated as exports.

Section 254(2) of the Income-tax Act permits only rectification of mistakes apparent from the record and cannot be used to review or recall an entire appellate order. The Tribunal held that recalling the earlier order would require rehearing and re-adjudication, which lies beyond the narrow rectification power. On the merits, the assessee's plea failed because the goods had not been physically exported out of India, and deemed export treatment under import-export policy could not be read into the Income-tax Act without express provision. The miscellaneous application was therefore rejected, and no rectification was allowed.

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Issues: Whether the Tribunal could recall its earlier order under section 254(2) of the Income-tax Act, 1961, on the plea that branch sales should be treated as exports for deduction under section 10B of the Income-tax Act, 1961.

Analysis: The scope of section 254(2) is confined to rectification of mistakes apparent from the record. It does not confer a power of review or permit recall of the entire order, because recall would require rehearing and re-adjudication of the appeal. The Tribunal also held that the assessee's claim on the merits did not disclose any apparent mistake, as the goods in question had not been physically exported out of India and the concept of deemed exports under import-export policy could not be imported into the Income-tax Act unless specifically provided. The cited precedent on on-site development expenditure abroad was held inapplicable to branch sales outside India.

Conclusion: The assessee was not entitled to recall or rectification under section 254(2), and the miscellaneous application was rejected.

Ratio Decidendi: Section 254(2) permits only correction of mistakes apparent from the record and cannot be used to review or recall an entire appellate order.

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