Inherent power to recall an ex parte appellate order extends to rehearing the appeal when no reasonable hearing was given.

An appellate authority has inherent jurisdiction to recall an ex parte order passed without granting a reasonable opportunity of hearing, because every court or tribunal may correct a mistake that causes injustice. Where a party was deprived of hearing due to such error, the authority may set aside the ex parte order and rehear the appeal. The power to dispose of an appeal under section 254(1) of the Income-tax Act, 1961 was treated as including the authority to recall the order and decide the matter afresh after hearing both sides.

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Issues: Whether the Appellate Assistant Commissioner had inherent jurisdiction to recall an ex parte order passed without granting a reasonable opportunity of hearing and to decide the appeal afresh.

Analysis: The assessee contended that no notice of hearing had been received and that the appeal had been decided ex parte. The Tribunal relied on the principle that every court or tribunal has inherent power to correct a mistake that results in injustice, and on the view that where a party has been deprived of hearing due to such mistake, the authority can recall the order. It was held that the power to dispose of the appeal under section 254(1) of the Income-tax Act, 1961, includes the jurisdiction to set aside an ex parte order passed without affording a reasonable opportunity of hearing and to rehear the matter.

Conclusion: The Appellate Assistant Commissioner had the power to recall the ex parte order and the matter was required to be decided afresh after hearing both sides.

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