JUDGMENT : A. Pasayat, J. - The only point involved in this writ application is whether the Income tax Appellate Tribunal, Cuttack Bench (in short "the Tribunal"), was legally justified in recalling its order dated March 30, 1989, passed in I. T. A. No. 80/CTK of 1986, in purported exercise of its powers u/s 254(2) of the Income Tax Act, 1961 (in short "the Act"). 2. The background facts relevant for disposal of the writ application are as follows : One, Messrs. Premier Industries (hereinafter referred to as "the assessee") was assessed to Income Tax by the Income Tax Officer, Special Survey Ward, Rourkela, for the assessment year 1980-81. Under the head "Salary and wages", the assessee claimed payment of Rs. 2,26,039. Since the assessee did not respond to letters dated October 14, 1981, October 19, 1981, and October 27, 1981, requiring it to furnish certain details, the Assessing Officer disallowed Rs. 78,500 out of the said claim. The primary ground for such disallowance was that no details were put forth in respect of the payment to temporary workers numbering thirty-four. Since there was no response to the notices requiring to furnish certain particulars, the assessment was completed ex parte u/s 144 of the Act. A proceeding u/s 271(1)(c) of the Act was initiated for deliberate furnishing of inaccurate particulars of income by inflation of expenditure. A sum of Rs. 67,125 was imposed as penalty which was at the maximum rate applicable. In the appeal relating to the quantum of assessment, the assessee tried to explain the position with reference to certain documents ; but the Commissioner of Income Tax (Appeals), Orissa, held that he was not convinced with the arguments put forth. He was of the view that if the assessee had been maintaining complete records in respect of attendance and wage payment to workers in the regular course of its business and if the Income Tax Officer wanted to satisfy himself regarding their genuineness by a thorough examination, nothing prevented the assessee from producing these records before the Income Tax Officer when he specifically called for them. He also found on verification of documents that the evidence produced in support of the claim was inadequate. He also found on verification of documents that the evidence produced in support of the claim was inadequate. When he specifically enquired whether the service rendered by the alleged workers and the payment made to them could be proved by producing them or by adducing other corroborative evidence except their alleged acknowledgments under thumb impressions, if the matter was restored to the Assessing Officer for further scrutiny, the assessee's representatives expressed their helplessness as the workers were engaged on a casual basis and their whereabouts were not known. On these facts, the Commissioner of Income Tax (Appeals) held that the wages paid by the assessee could not at all be accepted as genuine ; but considering the increase in the turnover, the rates of wages, etc., the disallowance was restricted to Rs. 52,000. These conclusions were again reiterated by the Commissioner of Income Tax (Appeals) while dealing with the appeal against levy of penalty u/s 271(1)(c). The Commissioner of Income Tax (Appeals) concluded that this was a case of disallowance of expenditure claimed by the assessee, since it was not in a position to produce the workers and/ or corroborative evidence in support of the entries in the books of account. But he held that, really speaking, there was no material on record to say that the claim under this head was falsely made. The explanation offered by the assessee that the expenditure was genuinely incurred was bona fide and this was supported by the entries in the books of account. The explanation was merely rejected as the assessee was unable to prove the payment of wages by producing the workers concerned. He accordingly held that this was not -a case where the assessee can be held to have concealed its income or furnished inaccurate particulars thereof and the penalty imposed by the Assessing Officer was cancelled. The order was assailed by the Revenue before the Tribunal. The Tribunal held that the conclusions of the Commissioner of Income Tax (Appeals) were erroneous. Though it was urged before the Tribunal that the assessee produced the muster rolls and wage register of casual labourers before the Assessing Officer, the records did not reveal that to be so. The Assessing Officer called upon the assessee to furnish the details by a letter dated October 27, 1981, which went unanswered. The assessee avoided production of relevant evidence. The Assessing Officer called upon the assessee to furnish the details by a letter dated October 27, 1981, which went unanswered. The assessee avoided production of relevant evidence. The Assessing Officer did not mention anything in his order about production of muster rolls of casual labourers and the wage register as was claimed by the assessee before the Tribunal. A query was made to the representatives of the assessee that if that was the position, why was such a ground not raised before the Commissioner of Income Tax (Appeals), viz., that documentary evidence was produced before the Assessing Officer, who failed to consider it. No answer was given by the representatives of the assessee. The Tribunal also noticed that the conclusion of the Commissioner of Income Tax (Appeals) that disallowance of expenditure as claimed by the assessee was made on the ground of non-production of workers was erroneous because what was required by the letter dated October 27, 1981, was production of the muster rolls and wage register of the casual labourers to establish its claim. It also noticed certain peculiar features like acceptance of grounds raised for the first time before the Commissioner of Income Tax (Appeals). There was no pleading of increased wages before the Assessing Officer at the time of levying penalty. But, for the first time, such a plea was taken in appeal. According to the Tribunal, such a new ground should not have been accepted and if the Commissioner of Income Tax (Appeals) was inclined to accept the same, he should have given an opportunity to the Assessing Officer to rebut it as required under Rule 46A of the Income Tax Rules, 1962 (in short "the Rules"). It also noticed that no material was produced regarding increase in salary and wages and, therefore, held that acceptance of the assessee's claim without any supporting material was uncalled for. With the aforesaid observations and conclusions, the Tribunal restored the penalty imposed by the Assessing Officer and set aside the order of the Commissioner of Income Tax (Appeals) granting relief. 3. With the aforesaid observations and conclusions, the Tribunal restored the penalty imposed by the Assessing Officer and set aside the order of the Commissioner of Income Tax (Appeals) granting relief. 3. An application purported to be u/s 254(2) of the Act was filed by the assessee making many grievances, viz., (i) that the Tribunal had wrongly stated that the muster rolls for labour payments were not produced and that no ground of appeal to that effect was taken before the Commissioner ; and (ii) that the Tribunal had not specified the rate at which the penalty was to be computed, i.e., whether the maximum or lower. The assessee's advocate pointed out that a specific ground was taken before the Commissioner of Income Tax (Appeals). The learned Departmental representative contended that the addition had been confirmed in the quantum appeal by the Tribunal and there was no scope for any amendment and any change proposed would amount to a review. He also pointed out that the reference application of the assessee had been rejected. 4. The Tribunal came to hold that the grounds of appeal before the Commissioner of Income Tax (Appeals) reflected that the ground regarding muster rolls was taken and there was a mistake apparent from the record. The fact that the addition had been confirmed by the Tribunal in the quantum appeal was considered not to be material because the assessee could agitate the matter again in the penalty appeal. With these conclusions, the order of the Tribunal was recalled and the appeal was directed to be heard afresh. 5. In support of the writ application, Mr. A. K. Ray, learned standing counsel for the Revenue, submitted that the Tribunal has not applied its mind to the facts of the case and has illegally directed the order to be recalled and the appeal to be heard afresh. Such a course, according to him, was impermissible and Section 254(2) had no application to the present case. 6. Mr. B. Panda, learned counsel for the assessee, however, submitted that the conclusions of the Tribunal were dependent on non-production of the documents in question and the Tribunal was not justified in holding that those documents were not produced. The fact being otherwise, the power u/s 254(2) had been rightly exercised. 7. The scope and ambit of an application of Section 254(2) is very limited. The fact being otherwise, the power u/s 254(2) had been rightly exercised. 7. The scope and ambit of an application of Section 254(2) is very limited. The same is restricted to rectification of mistakes apparent from the record. We shall first deal with the question of the power of the Tribunal to recall an order in its entirety. Recalling the entire order obviously would mean passing of a fresh order. That does not appear to be the legislative intent. The order passed by the Tribunal u/s 254(1) is the effective order so far as the appeal is concerned. Any order passed u/s 254(2) either allowing amendment or refusing to amend gets merged with the original order passed. The order as amended or remaining unamended is the effective order for all practical purposes. The same continues to be an order u/s 254(1). That is the final order in the appeal. An order u/s 254(2) does not have existence de hors the order u/s 254(1). Recalling of the order is not permissible u/s 254(2). Recalling of an order automatically necessitates rehearing and readjudication of the entire subject-matter of appeal. The dispute no longer remains restricted to any mistake sought to be rectified. Power to recall an order is prescribed in terms of rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, and that too only in cases where the assessee shows that it had a reasonable cause for being absent at a time when the appeal was taken up and was decided ex parte. 8. Coming to the question whether, on the facts of the case, the Tribunal was justified even otherwise in recalling its order, much has been made of the Tribunal's observation that documents were not produced. The materials on record clearly show that the documents were not produced. In this connection, the letter dated October 27, 1981, is to be referred to. Undisputedly, by the said letter, the assessee was directed to produce relevant evidence before the Assessing Officer. The Tribunal, in its original order dated March 3, 1989, had categorically stated that the Assessing Officer, in his letter dated October 27, 1981, had asked the assessee to produce the muster rolls and wage register relating to casual labourers to establish its claim. This clearly rules out the possibility of those having been produced earlier as claimed by the assessee. This clearly rules out the possibility of those having been produced earlier as claimed by the assessee. Therefore, as was rightly observed by the Tribunal in paragraph 8 of its order, there is nothing to show that those were really produced before the Assessing Officer at any time. Had that been the case, the question of the Assessing Officer writing a letter on October 27, 1981, to the assessee to produce the muster rolls and the wage register of casual labourers would not have arisen. As it appears from the materials on record, the salary register and muster rolls were produced in respect of the permanent employees. In the appeal relating to quantum of assessment, the Commissioner of Income Tax (Appeals) took note of the assessee's conduct in withholding those records from the Assessing Officer when he wanted to undertake a detailed scrutiny, and it was held to be suggestive of the fact that the assessee found it advantageous not to produce them. These observations clearly reinforce the conclusion that these were not produced by the assessee. At this stage, it would be relevant to refer to ground No. 8 before the Commissioner of Income Tax (Appeals) in the appeal against the order imposing penalty. Much stress has been laid by learned counsel for the assessee on this ground. According to him, this was the crucial ground and the Tribunal took note of it while dealing with the application u/s 254(2). Since much emphasis has been laid on this, we quote the relevant portions of this particular ground : "For that in the original assessment the then Income Tax Officer, Special Survey Ward, has also verified the salary register and muster rolls, etc., along with payments made to temporary and casual employees engaged by the appellant . . . ." (underlining by us). 9. This obviously shows that the payments made to the temporary as well as permanent employees engaged by the assessee were not reflected in the salary register, the muster rolls, etc. Otherwise, there is no occasion for use of the expression "along with". Therefore, the Tribunal was justified in its conclusion while deciding the appeal that no specific ground was taken relating to production of muster rolls and wage register for the casual and temporary workers. The Tribunal, while dealing with the application for rectification, fell into an error by taking a different view. Therefore, the Tribunal was justified in its conclusion while deciding the appeal that no specific ground was taken relating to production of muster rolls and wage register for the casual and temporary workers. The Tribunal, while dealing with the application for rectification, fell into an error by taking a different view. The correctness of a conclusion on facts cannot be the subject-matter of an application for rectification. 10. As a result of all these, we are of the view that the Tribunal was not justified in recalling its order. Consequentially, the order of the Tribunal in Miscellaneous Application No. 14/CTK of 1990 dated December 21, 1990, annexed as annexure-1 to the writ application is quashed. 11. The writ application accordingly succeeds. There shall be no order as to costs. S.K. Mohanty, J. 12. I agree.