Tribunal Order Recalled for Limited Rectification Under Section 254(2) Due to Non-Adjudication of Ground

By | October 10, 2026
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Tribunal Order Recalled for Limited Rectification Under Section 254(2) Due to Non-Adjudication of Ground

Issue

Whether the non-adjudication of a specific ground of appeal raised by the assessee constitutes a mistake apparent from the record under Section 254(2), warranting the recall of the Tribunal’s order for limited re-hearing.

Facts

  • Appeal & Ground Raised: The assessee filed an appeal before the Income Tax Appellate Tribunal for Assessment Year 2020-21, raising Ground No. 3.5 concerning a transfer pricing adjustment made on account of interest on delayed receivables.
  • Original Order: The Tribunal passed its main order in the appeal on 29.04.2026.
  • Miscellaneous Application: The assessee filed a Rectification Application under Section 254(2), pointing out that Ground No. 3.5 had not been specifically adjudicated or considered in the Tribunal’s order.
  • Apparent Omission: Upon reviewing the record, the Tribunal noted that Ground No. 3.5 remained unaddressed in the original order dated 29.04.2026.

Decision

  • Omission Amounts to Rectifiable Error: Non-adjudication of a specific ground raised by an appellant constitutes a mistake apparent from the record within the meaning of Section 254(2).
  • Limited Recall Ordered: The original order of the Tribunal dated 29.04.2026 was recalled solely and to the limited extent of Ground No. 3.5.
  • Remand for Adjudication: The matter was restored to the file for fresh hearing and adjudication specifically on the unaddressed ground concerning interest on delayed receivables. (Matter remanded)

Key Takeaways

  • Scope of Section 254(2) Rectification: Failure by the Tribunal to decide a specific ground of appeal raised by a party is a clear error apparent on the face of the record that can be rectified under Section 254(2).
  • Limited Recall Permissible: In cases of non-adjudication of a particular ground, the entire appellate order need not be set aside; it can be recalled strictly for the limited purpose of adjudicating the omitted ground.
IN THE ITAT BANGALORE BENCH ‘C’
DRG Analytics and Insights (P.) Ltd.
v.
Assistant Commissioner of Income-tax
Keshav Dubey, Judicial Member
and Waseem Ahmed, Accountant Member
MA 65 (BANG) of 2026
IT(TP)A No.1431 (Bang) of 2024
[Assessment year 2020-21]
AUGUST  25, 2026
Nikhil Tiwari, CA for the Applicant. Sundeep Kumar H.S., Addl. CIT for the Respondent.
ORDER
Waseem Ahmed, Accountant Member.-This Miscellaneous Application filed by the assessee under section 254(2) of the Income-tax Act, 1961 (“the Act”) is directed against the order dated 29.04.2026 passed by the Tribunal in IT(TP)A No. 1431/Bang/2024 for Assessment Year 2020-21.
2. The assessee submitted that Ground No. 3.5 raised in the appeal, relating to the adjustment on account of interest on delayed receivables on the ground that the assessee was a debt-free company and that no interest-bearing debt had been availed by the assessee, was specifically raised and argued before the Tribunal. However, while adjudicating Ground Nos. 3 to 3.4 and Ground No. 4, the Tribunal inadvertently omitted to adjudicate Ground No. 3.5. Accordingly, the ld. AR requested for recalling the order limited to the extent of ground No. 3.5 within the provisions of section 254(2) of the Act.
3. On the other hand, the learned DR submitted that there is no apparent mistake in the order of the ITAT which requires recalling the impugned ground of appeal.
4. We have considered the rival submissions of both the parties and perused the materials available on record. On examination of the order dated 29.04.2026, we find that Ground No. 3.5 raised by the assessee has not been specifically adjudicated. Since the said ground was a specific ground raised by the assessee and requires adjudication, there is an apparent omission in the order which warrants rectification under section 254(2) of the Act. Accordingly, the Miscellaneous Application filed by the assessee is allowed. The order of the Tribunal dated 29.04.2026 in IT(TP)A No. 1431/Bang/2024 is recalled to the limited extent of Ground No. 3.5 only. Ground No. 3.5 of the assessee’s appeal is restored to the file of the Tribunal for fresh adjudication in accordance with law, after affording reasonable opportunity of being heard to both parties. The findings already recorded by the Tribunal in respect of the other grounds shall remain undisturbed. The appeal is accordingly fixed for hearing on 22.09.2026 for the limited purpose of adjudication of Ground No. 3.5. Since the next date of hearing, i.e., 22.09.2026, has been announced in the open court, the requirement of separately intimating the parties about the said date of hearing is hereby dispensed with. Accordingly, the Miscellaneous Application filed by the assessee is allowed in the above terms.
5. In the result, the Miscellaneous Application filed by the assessee is allowed in the above terms.