Limitation for Tribunal recall applications runs from actual knowledge when the order was not duly communicated.

A rectification or recall application under Section 254(2) of the Income-tax Act was held not to be barred merely from the date of the Tribunal's order where the assessee had not been duly served and the order had not been communicated. The limitation period was linked to actual or constructive knowledge of the order, consistent with the statutory requirement of communication under Section 254(3). On that basis, an ex parte disposal followed by refusal to entertain the recall application was found unsustainable, and the matter was restored for fresh hearing on merits after notice to both parties.

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Issues: Whether the miscellaneous application under Section 254(2) of the Income-tax Act, 1961 was barred by limitation and whether the ex parte order of the Tribunal required interference for want of service and communication of the order.

Analysis: The address used by the Department before the Tribunal was the assessee's former address, and the assessee was not served in the appeal before the Tribunal. In such circumstances, the period for moving a rectification or recall application could not be computed mechanically from the date on which the order was passed. The statutory scheme under Section 254(3) required communication of the Tribunal's order to the parties, and the relevant point for limitation was the date of actual or constructive knowledge of the order. Since the assessee filed the miscellaneous application within six months of actual receipt, the Tribunal erred in treating the application as time-barred. The earlier ex parte disposal, followed by refusal to entertain the recall application, was unsustainable.

Conclusion: The limitation objection failed and the impugned order was liable to be quashed. The ex parte order was also set aside and the matter was directed to be heard afresh on merits after giving both sides an opportunity of hearing.

Final Conclusion: The petition succeeded, the Tribunal's order was annulled, and the appeal was restored for decision on merits after notice to the parties.

Ratio Decidendi: For a rectification or recall application under Section 254(2) of the Income-tax Act, 1961, limitation begins when the affected party has actual or constructive knowledge of the Tribunal's order, and not merely from the date on which the order was passed, where the order was not duly communicated.

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