JUDGMENT :

A. PASAYAT. - The point involved in this writ application is whether the Income Tax Appellate Tribunal, Cuttack Bench (in short "the Tribunal"), was justified in recalling its order dated April 14, 1989, in I.T.A. No. 76/CTK of 1986 and C.O. No. 28 (CTK) of 1986, in purported exercise of the powers u/s 254(2) of the Income Tax Act, 1961 (in short "the Act").

The background facts, shorn of unnecessary details, are as follows :

A partnership-firm styled M/s. Bombay Hotel (hereinafter referred to as "the assessee") runs a hotel and, for the assessment year 1982-83, was assessed to Income Tax by the Income Tax Officer, Ward-A, Special Investigation Circle, Bhubaneswar. On the basis of certain documents seized during a search of the premises of the assessee on August 24, 1981, the figures submitted by the assessee were rejected and an addition of Rs. 60,540 to the declared income was made. In appeal, the addition was reduced by Rs. 60,540 to the declared income was made. In appeal, the addition was reduced by Rs. 50,540 by the commissioner of Income Tax (Appeals), Orissa. The Revenue challenged the relief granted to the assessee by the Commission of Income Tax (Appeals), while the assessee filed a cross-objection supporting the order of the Commissioner of Income Tax (Appeals). The Tribunal, in order to ascertain whether the books of account were maintained in a regular and truthful manner, verified certain registers which were produced at the time of hearing. On verification, the Tribunal came to hold that the maintenance of books of account was defective. If recorded a specific finding that the assessees counsel fairly conceded that the books of account maintained by the assessee even after the date of entry were defective. The Tribunal in detail discussed a particular entry dated August 24, 1981. After taking into consideration certain other materials, the Tribunal restored the addition made by the Assessing Officer and set aside the relief granted by the commissioner of Income Tax (Appeals).

An application was filed by the assessee before the Tribunal purporting to be one u/s 254 of the Act. The following reasons were indicated to warrant action u/s 254.

"(i) The order does not record as to from where the information relating to the advance amount of Rs. 20 was obtained.

(ii) It is not essential to obtain the signature of the customer on the bills issued by the assessee.

(iii) After recording the fall of lodging receipts from Rs. 36,946 per month during the period before the raid to Rs. 22,104 per month during the period after the raid, the order completely ignores the said finding and proceeds on the basis as if there has been no such fall at all.

(iv) If is common knowledge worthy of taking judicial notice that no tea stall or restaurant gives bills or cash memos for ready made tea or coffee sold by it."

These were indicated to be mistakes apparent from the record.The motion for rectification was objected to by the Revenue. However, the Tribunal held that though technically one can say that it is in the discretion of the Tribunal as to what should be the addition; in a discrepancy of Rs. 11, the addition of Rs. 60,540 appeared to be beyond justification. As indicated above, the stand of the assessee before the Tribunal in support of the application for rectification was that, even if accepting that there was a discrepancy of Rs. 11, the same could have justified an addition of Rs. 100 and, instead of that, if it is made Rs. 1,00,000, though technically it may not be, but certainly in the real sense is an apparent mistake on record. This plea found favour with the Tribunal, which set aside the original order dated April 14, 1989, and directed rehearing of the appeal. According to the Tribunal, for the discrepancy of Rs. 11, addition of Rs. 60,540 did not appear to be justified. It also found that the ground indicated about fall of receipts is acceptable because there appeared to be dispute amongst the partners.

The action of