Tribunal recall under mistake apparent from record where new factual basis was used without hearing the assessee

Section 254(2) may be invoked where a Tribunal order rests on a new factual basis that was not argued or put to the parties at hearing, because denial of an opportunity to meet that basis can amount to a mistake apparent from the record and a breach of natural justice. The note explains that, on this reasoning, recall may be justified for a limited rehearing focused on the unaddressed factual foundation so the assessee can respond properly.

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Issues: Whether the Tribunal's earlier order required recall under section 254(2) of the Income-tax Act, 1961 on the ground that the assessee was denied a proper opportunity to meet the new factual basis adopted in the decision and, therefore, a mistake apparent from the record had occurred.

Analysis: The order records that the decision on the main appeal had proceeded on factual reasons that were neither argued nor placed before the parties at the hearing. The Tribunal held that the assessee had not been given an opportunity to address the new stand adopted by the Bench, and that this omission amounted to a violation of natural justice. It further treated denial of such opportunity as a mistake apparent on the record, warranting recall of the original order for a limited rehearing on the new factual basis.

Conclusion: The recall application was held maintainable and the original order was recalled for limited rehearing after giving the assessee an opportunity to meet the new factual basis.

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