The Tribunal has recalled its whole order on a rectification application. Does section 254(2) give it that power, or can it only amend the order?
It has the power, in the right circumstances. A Full Bench of the Delhi High Court held that under section 254(2) the Tribunal can recall its order in its entirety where it is satisfied that prejudice has resulted to a party attributable to the Tribunal's own mistake, error or omission, and where that error is manifest. That has nothing to do with any inherent power of review. The Court held that its own earlier decisions in K.L. Bhatia, Deeksha Suri, Karan and Co, J.N. Sahni and Baljeet Jolly, which had laid down that the Tribunal can never recall an order in entirety, do not state the law correctly after the Supreme Court's decision in Honda Siel Power Products.
Decided by the High Court (High Court of Delhi, Full Bench - the Chief Justice (Dipak Misra), Justice A.K. Sikri and Justice Manmohan (judgment by Dipak Misra, CJ)) on 2010-12-24, reported as WP (C) Nos. 6460 to 6465 of 2010 (Delhi High Court, Full Bench), reserved 26 November 2010, pronounced 24 December 2010. It bears on section 254(2), section 254(1) of the Income Tax Act 1961, in Appeals and Revision & Rectification matters.
This is the reference decision that cleared away a whole line of Delhi authority, and it is the answer to the standard objection that section 254(2) permits only amendment and never recall. It is worth reading for the boundary it draws. The power is grounded in the Tribunal's duty to atone for its own mistake, not in any power to rehear; so what has to be shown is prejudice traceable to the Tribunal's error or omission, and the error must be manifest. Saurashtra Kutch Stock Exchange, which the Court set out at length, gives the clearest instance: failure to consider a binding decision of the jurisdictional High Court or the Supreme Court that was available is a mistake apparent from the record. The Court also directed how a challenge to a recall order should be judged - on the anvil of Honda Siel and Saurashtra Kutch, and not on the earlier Delhi line.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
The petitioner came under Articles 226 and 227 against an order of the Delhi Bench 'F' of the Tribunal dated 22 January 2010, by which the Tribunal allowed the Revenue's miscellaneous applications for assessment years 2000-01 to 2005-06 and recalled its own composite order of 17 June 2009. Counsel for the petitioner raised two contentions: that the Tribunal has no power at all to recall an order under section 254(2), and that in any event the facts did not warrant recall. He relied on a long line of Delhi decisions - K.L. Bhatia, Deeksha Suri, Karan and Co, J.N. Sahni, Vichtra Construction, Om Prakash Bhola, the Delhi High Court decision in Honda Siel Power Products, Ras Bihari Bansal and Perfetti Van Melle - all holding that the Tribunal cannot recall an order in exercise of that power. He argued that the Supreme Court's decision in Honda Siel Power Products was not an authority on total recall because the point was neither raised nor argued, and that it had been distinguished by the Madras, Bombay, Karnataka and Rajasthan High Courts. A Division Bench, doubting the precedential value of that Delhi line in the light of the Supreme Court's decision, referred the matter to a larger Bench. The Full Bench was constituted to decide the single question whether the Tribunal has power to recall an order in entirety under section 254(2), all ancillary questions about the limits of that power being left to the Division Bench.
The reference was answered in five conclusions. Honda Siel Power Products is an authority for the proposition that the Tribunal can in certain circumstances recall its own order, and there is no absolute prohibition. The Delhi decisions in K.L. Bhatia, Deeksha Suri, Karan and Co, J.N. Sahni and Baljeet Jolly, which had laid down that the Tribunal can under no circumstances recall its order in entirety, do not lay down the correct statement of law, and any other decision resting on that line is likewise not correct on this point. The Tribunal, exercising the power of rectification under section 254(2), can recall its order in entirety if satisfied that prejudice has resulted to a party attributable to the Tribunal's mistake, error or omission, and that the error is a manifest error; this has nothing to do with any doctrine of inherent power of review. Where a recall order is challenged by writ petition, it is to be tested on the law laid down in Honda Siel Power Products and Saurashtra Kutch Stock Exchange. The writ petitions were directed to be listed before the appropriate Division Bench.
The Full Bench's reasoning as it survives rests on the two Supreme Court decisions it set out. In Saurashtra Kutch Stock Exchange the core question was whether non-consideration of a decision of the jurisdictional High Court or of the Supreme Court can be a mistake apparent from the record, and the Supreme Court held that it can and is rectifiable under section 254(2). It said that rectification stems from the fundamental principle that justice is above all, and it is exercised to remove error and disturb finality. It quoted S. Nagaraj: neither rules of procedure nor technicalities of law can stand in the way of justice; where a court finds that an order was passed under a mistake which it would not have made but for an erroneous assumption, and whose perpetuation would result in a miscarriage of justice, it cannot on any principle be precluded from rectifying the error; mistake is an accepted reason to recall an order, and the root from which the power flows is the anxiety to avoid injustice. On those facts the Tribunal had decided the appeal without a Gujarat High Court decision delivered a few months earlier being brought to its attention, and it was held to have committed no error of law or jurisdiction in rectifying. From Honda Siel the Bench drew the distinction that carries the whole judgment: atonement by the Tribunal to a party wronged by the Tribunal's own mistake has nothing to do with an inherent power of review. Finally the Bench examined the decisions of the Madras, Bombay, Karnataka and Rajasthan High Courts relied on for the petitioner and found they had distinguished Honda Siel on the facts, none of them holding that the Tribunal can under no circumstances recall its own order.
The tribunal, while exercising the power of rectification under Section 254(2) of the Act, can recall its order in entirety if it is satisfied that prejudice has resulted to the party which is attributable to the tribunal's mistake, error or omission.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppIt has the power, in the right circumstances. A Full Bench of the Delhi High Court held that under section 254(2) the Tribunal can recall its order in its entirety where it is satisfied that prejudice has resulted to a party attributable to the Tribunal's own mistake, error or omission, and where that error is manifest. That has nothing to do with any inherent power of review. The Court held that its own earlier decisions in K.L. Bhatia, Deeksha Suri, Karan and Co, J.N. Sahni and Baljeet Jolly, which had laid down that the Tribunal can never recall an order in entirety, do not state the law correctly after the Supreme Court's decision in Honda Siel Power Products. This was decided by the High Court (High Court of Delhi, Full Bench - the Chief Justice (Dipak Misra), Justice A.K. Sikri and Justice Manmohan (judgment by Dipak Misra, CJ)) and bears on section 254(2), section 254(1) of the Income Tax Act 1961. It is reported as WP (C) Nos. 6460 to 6465 of 2010 (Delhi High Court, Full Bench), reserved 26 November 2010, pronounced 24 December 2010. This is the reference decision that cleared away a whole line of Delhi authority, and it is the answer to the standard objection that section 254(2) permits only amendment and never recall. It is worth reading for the boundary it draws. The power is grounded in the Tribunal's duty to atone for its own mistake, not in any power to rehear; so what has to be shown is prejudice traceable to the Tribunal's error or omission, and the error must be manifest. Saurashtra Kutch Stock Exchange, which the Court set out at length, gives the clearest instance: failure to consider a binding decision of the jurisdictional High Court or the Supreme Court that was available is a mistake apparent from the record. The Court also directed how a challenge to a recall order should be judged - on the anvil of Honda Siel and Saurashtra Kutch, and not on the earlier Delhi line. If it applies to you, the first step is this: Frame a miscellaneous application under section 254(2) around the Tribunal's own error or omission and the prejudice it caused, not around a wish to re-argue the appeal.
The petitioner came under Articles 226 and 227 against an order of the Delhi Bench 'F' of the Tribunal dated 22 January 2010, by which the Tribunal allowed the Revenue's miscellaneous applications for assessment years 2000-01 to 2005-06 and recalled its own composite order of 17 June 2009. Counsel for the petitioner raised two contentions: that the Tribunal has no power at all to recall an order under section 254(2), and that in any event the facts did not warrant recall. He relied on a long line of Delhi decisions - K.L. Bhatia, Deeksha Suri, Karan and Co, J.N. Sahni, Vichtra Construction, Om Prakash Bhola, the Delhi High Court decision in Honda Siel Power Products, Ras Bihari Bansal and Perfetti Van Melle - all holding that the Tribunal cannot recall an order in exercise of that power. He argued that the Supreme Court's decision in Honda Siel Power Products was not an authority on total recall because the point was neither raised nor argued, and that it had been distinguished by the Madras, Bombay, Karnataka and Rajasthan High Courts. A Division Bench, doubting the precedential value of that Delhi line in the light of the Supreme Court's decision, referred the matter to a larger Bench. The Full Bench was constituted to decide the single question whether the Tribunal has power to recall an order in entirety under section 254(2), all ancillary questions about the limits of that power being left to the Division Bench. The matter was decided on 2010-12-24 by the High Court (High Court of Delhi, Full Bench - the Chief Justice (Dipak Misra), Justice A.K. Sikri and Justice Manmohan (judgment by Dipak Misra, CJ)). On those facts the High Court held as follows. The reference was answered in five conclusions. Honda Siel Power Products is an authority for the proposition that the Tribunal can in certain circumstances recall its own order, and there is no absolute prohibition. The Delhi decisions in K.L. Bhatia, Deeksha Suri, Karan and Co, J.N. Sahni and Baljeet Jolly, which had laid down that the Tribunal can under no circumstances recall its order in entirety, do not lay down the correct statement of law, and any other decision resting on that line is likewise not correct on this point. The Tribunal, exercising the power of rectification under section 254(2), can recall its order in entirety if satisfied that prejudice has resulted to a party attributable to the Tribunal's mistake, error or omission, and that the error is a manifest error; this has nothing to do with any doctrine of inherent power of review. Where a recall order is challenged by writ petition, it is to be tested on the law laid down in Honda Siel Power Products and Saurashtra Kutch Stock Exchange. The writ petitions were directed to be listed before the appropriate Division Bench.
The Full Bench's reasoning as it survives rests on the two Supreme Court decisions it set out. In Saurashtra Kutch Stock Exchange the core question was whether non-consideration of a decision of the jurisdictional High Court or of the Supreme Court can be a mistake apparent from the record, and the Supreme Court held that it can and is rectifiable under section 254(2). It said that rectification stems from the fundamental principle that justice is above all, and it is exercised to remove error and disturb finality. It quoted S. Nagaraj: neither rules of procedure nor technicalities of law can stand in the way of justice; where a court finds that an order was passed under a mistake which it would not have made but for an erroneous assumption, and whose perpetuation would result in a miscarriage of justice, it cannot on any principle be precluded from rectifying the error; mistake is an accepted reason to recall an order, and the root from which the power flows is the anxiety to avoid injustice. On those facts the Tribunal had decided the appeal without a Gujarat High Court decision delivered a few months earlier being brought to its attention, and it was held to have committed no error of law or jurisdiction in rectifying. From Honda Siel the Bench drew the distinction that carries the whole judgment: atonement by the Tribunal to a party wronged by the Tribunal's own mistake has nothing to do with an inherent power of review. Finally the Bench examined the decisions of the Madras, Bombay, Karnataka and Rajasthan High Courts relied on for the petitioner and found they had distinguished Honda Siel on the facts, none of them holding that the Tribunal can under no circumstances recall its own order. In the words reproduced by the source cited on this page: "The tribunal, while exercising the power of rectification under Section 254(2) of the Act, can recall its order in entirety if it is satisfied that prejudice has resulted to the party which is attributable to the tribunal's mistake, error or omission."
It was decided by the High Court on 2010-12-24 and is reported as WP (C) Nos. 6460 to 6465 of 2010 (Delhi High Court, Full Bench), reserved 26 November 2010, pronounced 24 December 2010. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 254(2), section 254(1), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. The reference was answered in five conclusions. Honda Siel Power Products is an authority for the proposition that the Tribunal can in certain circumstances recall its own order, and there is no absolute prohibition. The Delhi decisions in K.L. Bhatia, Deeksha Suri, Karan and Co, J.N. Sahni and Baljeet Jolly, which had laid down that the Tribunal can under no circumstances recall its order in entirety, do not lay down the correct statement of law, and any other decision resting on that line is likewise not correct on this point. The Tribunal, exercising the power of rectification under section 254(2), can recall its order in entirety if satisfied that prejudice has resulted to a party attributable to the Tribunal's mistake, error or omission, and that the error is a manifest error; this has nothing to do with any doctrine of inherent power of review. Where a recall order is challenged by writ petition, it is to be tested on the law laid down in Honda Siel Power Products and Saurashtra Kutch Stock Exchange. The writ petitions were directed to be listed before the appropriate Division Bench. It arises in Appeals and Revision & Rectification matters, on section 254(2), section 254(1) of the Income Tax Act 1961, and was decided by High Court of Delhi, Full Bench - the Chief Justice (Dipak Misra), Justice A.K. Sikri and Justice Manmohan (judgment by Dipak Misra, CJ). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. The strongest ground is a binding decision of the jurisdictional High Court or the Supreme Court that was on the record or available and was not considered; establish that it was cited or was available at the time. Where the department secures a recall, test the order against Honda Siel and Saurashtra Kutch rather than relying on the older Delhi decisions, which this Full Bench has held do not state the law correctly. Do not argue for a recall as an exercise of inherent power of review; the Full Bench was careful to separate the two, and framing it as review will defeat the application.
Still good law. A Full Bench judgment of the Delhi High Court read through to its five numbered conclusions and the answering of the reference; it overrules the earlier Delhi Division Bench line on this point and binds within that jurisdiction. I could not check whether it has been taken to the Supreme Court or considered there since. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The harvested page is clipped: the source marks that about 6,147 characters of the middle are not reproduced. The missing passage falls in the Bench's survey of its earlier decisions, breaking off in the extract from J.N. Sahni and resuming in the extract from Honda Siel Power Products. The reference question, the facts, counsel's submissions, the passages from Saurashtra Kutch Stock Exchange and Honda Siel on which the conclusions rest, and all five conclusions survive. The batch line dated the case to 2011; it was pronounced on 24 December 2010 and the date is taken from the judgment. The Full Bench decided only the question of power and expressly left all questions about the limits on its exercise, and the merits of this particular recall, to the Division Bench, so this record says nothing about whether the recall of 22 January 2010 was itself justified. The favours field is marked mixed because the reference was answered against the petitioner's first contention while the petitions themselves remained undecided. The source page carried no reporter citations, so the case numbers are given instead. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The reference was answered in five conclusions. Honda Siel Power Products is an authority for the proposition that the Tribunal can in certain circumstances recall its own order, and there is no absolute prohibition. The Delhi decisions in K.L. Bhatia, Deeksha Suri, Karan and Co, J.N. Sahni and Baljeet Jolly, which had laid down that the Tribunal can under no circumstances recall its order in entirety, do not lay down the correct statement of law, and any other decision resting on that line is likewise not correct on this point. The Tribunal, exercising the power of rectification under section 254(2), can recall its order in entirety if satisfied that prejudice has resulted to a party attributable to the Tribunal's mistake, error or omission, and that the error is a manifest error; this has nothing to do with any doctrine of inherent power of review. Where a recall order is challenged by writ petition, it is to be tested on the law laid down in Honda Siel Power Products and Saurashtra Kutch Stock Exchange. The writ petitions were directed to be listed before the appropriate Division Bench.
TaxSphere, “Lachman Dass Bhatia Hingwala (P) Ltd v ACIT”, https://taxnotice.vittsphere.com/caselaw/case/lachman-dass-bhatia-hingwala-p-ltd-v-acit/ (validity last checked 2026-08-29)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
The Tribunal dismissed my appeal for non-appearance and now says my restoration application is barred by the six months in section 254(2). Is that right?
Can the Tribunal condone delay in a section 254(2) miscellaneous application, or extend the six months for an order passed before 1 June 2016?
I won my section 36(1)(va) appeal in the Tribunal before Checkmate. The department has now filed a miscellaneous application to recall the order. Can it do that?
The Bench decided against me without dealing with the binding High Court decision I had cited. Is that a mistake apparent under section 254(2)?
