Rectification under section 254(2) cannot be used for review or rehearing on merits; recall application held not maintainable.

Section 254(2) permits only correction of mistakes apparent from the record and does not authorise review, recall, or rehearing on the merits. A miscellaneous application alleging non-consideration of material and mistaken appreciation of facts cannot be used to re-argue evidence or seek a fresh decision in place of the original appellate order. The Tribunal's power is confined to rectifying a manifest error, not revisiting its conclusion on a different view of the evidence. On that basis, the application seeking recall of the earlier order was not maintainable and was liable to be dismissed.

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Issues: Whether the Miscellaneous Application seeking recall of the Tribunal's earlier order could be entertained under section 254(2) of the Income-tax Act, 1961 on the ground of alleged non-consideration of material and mistaken appreciation of facts.

Analysis: The application sought reopening of the merits of the earlier appellate decision and not rectification of any obvious mistake. The scope of section 254(2) is confined to correction of mistakes apparent from the record and does not confer any power of review or recall of the entire order. Re-arguing the case on the basis that the Tribunal should have appreciated the evidence differently would amount to a rehearing on merits, which is impermissible. An order under section 254(2) cannot be used to substitute a fresh decision for the original appellate order, and the Tribunal can only correct a manifest error, not revisit its conclusion.

Conclusion: The Miscellaneous Application was not maintainable for recall of the earlier order and was liable to be dismissed.

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