Procedural defect and natural justice permit recall when a section 254(2) application is decided without valid notice or hearing.

A procedural defect going to the root can justify recall under section 254(2) where a Miscellaneous Application is disposed of without valid notice to the assessee and without hearing. Here, the Registry mistakenly served the Revenue's application on the appellant instead of the assessee, so the statutory notice requirement and principles of natural justice were not met. The Tribunal treated this as a case of procedural review rather than review on merits, invoked its inherent power, and applied actus curiae neminem gravabit. The earlier order was recalled and the Miscellaneous Application was directed to be listed afresh.

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Issues: Whether the Tribunal could recall its earlier order passed under section 254(2) of the Income-tax Act, 1961, where the Miscellaneous Application was disposed of without notice to the assessee and without affording an opportunity of hearing.

Analysis: The Tribunal held that the distinction between review on merits and procedural review permits recall where the proceeding is vitiated by a procedural defect going to the root of the matter. Since the Registry had inadvertently served the Revenue's application on the appellant instead of the assessee, no valid notice was issued to the assessee and no opportunity of hearing was granted. This violated the statutory requirement of notice under the proviso to section 254(2) and offended the principles of natural justice. The Tribunal invoked its inherent power of procedural review and applied the maxim actus curiae neminem gravabit.

Conclusion: The earlier order dated 22/07/2025 was recalled and the Miscellaneous Application was directed to be listed afresh; the assessee's application succeeded.

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