Rectification for mistake apparent from record permits recall of an order contrary to binding Supreme Court law on delayed EPF and ESI contributions.

A Tribunal may rectify an earlier order under section 254(2) when that order is inconsistent with a later Supreme Court declaration of law, because such declaration states the law as it always existed unless made prospective. Non-consideration of the binding legal position amounts to a mistake apparent from the record, and rectification in that situation is not a merits review. Applying this principle to delayed employee contributions to EPF and ESI, the Tribunal accepted the Revenue's rectification plea, recalled its earlier order, and directed fresh hearing to align the matter with the Supreme Court's ruling in Checkmate Services.

---

---

Issues: Whether the Tribunal's earlier order disallowing the Revenue's claim on delayed employee's contribution to EPF and ESI could be recalled under section 254(2) of the Income-tax Act, 1961 on the ground that it was inconsistent with the subsequent decision of the Supreme Court in Checkmate Services.

Analysis: The Tribunal held that a later declaration of law by the Supreme Court states the law as it always existed and, unless expressly made prospective, applies retrospectively. Non-consideration of the correct legal position as settled by the Supreme Court constitutes a mistake apparent from the record. It further held that rectification under section 254(2) is permissible when an existing order is not in conformity with binding law declared by the Supreme Court, and such exercise does not amount to a review on merits. On that basis, the Tribunal applied the Supreme Court's ruling on delayed employee contributions and concluded that its earlier view required correction.

Conclusion: The miscellaneous application was maintainable and was allowed. The earlier order of the Tribunal was recalled, and the appeal was directed to be listed for fresh hearing to give effect to the Supreme Court's ruling.

Final Conclusion: The Tribunal accepted the Revenue's rectification plea, treated the earlier order as containing a rectifiable mistake, and reopened the matter for limited reconsideration in light of the binding Supreme Court decision.

Ratio Decidendi: A Tribunal order contrary to the law subsequently declared by the Supreme Court can be rectified under section 254(2) because such later declaration operates retrospectively unless expressly made prospective, and non-conformity with binding law is a mistake apparent from the record.

---