Rectification power under Section 254(2) cannot reopen merits or recall a final Tribunal order beyond apparent mistakes.

Section 254(2) rectification is limited to correcting a mistake apparent from the record and cannot be used to reopen an appeal, re-hear the merits, or replace an earlier final order with a fresh decision. Where the original Tribunal order was detailed and decided on merits, recalling it exceeds the statutory limits of rectification. Any challenge to an allegedly erroneous finding on facts or law must be pursued through appeal, not by invoking rectification jurisdiction. The Tribunal's recall order was therefore unsustainable and liable to be set aside.

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Issues: Whether the Income Tax Appellate Tribunal could, in exercise of rectification power under Section 254(2), recall its earlier final order on the ground of alleged error on merits.

Analysis: The rectification jurisdiction under Section 254(2) is confined to correcting a mistake apparent from the record. It does not permit the Tribunal to reopen the entire appeal, re-hear the matter on merits, or substitute a fresh decision for the earlier adjudication. Where the original order was a detailed order rendered on merits, recall of that order amounts to an exercise beyond the statutory limits of rectification. Any challenge to an allegedly erroneous order on facts or law had to be pursued through appeal, not by invoking Section 254(2).

Conclusion: The recall order passed by the Tribunal under Section 254(2) was unsustainable and was rightly liable to be set aside.

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