JUDGMENT : A. Pasayat, J. - The Commissioner of Income Tax, Orissa, and the Income Tax Officer, Ward A, Sambalpur, call in question the legality of the order passed by the Income Tax Appellate Tribunal, Cuttack Bench (hereinafter referred to as " the Tribunal"), in purported exercise of its powers u/s 254(2) of the Income Tax Act, 1961 (in short "the Act"). 2. The background facts are as follows : One, Shri H. K. Phool (opposite party No. 3) (hereinafter referred to as " the assessee ") filed his return of income before petitioner No. 2 for the assessment year 1978-79. From the statements filed, the Assessing Officer found that a loan of Rs. 50,000 from one Smt. Sara Devi was reflected. This amount was held as unexplained investment of the assessee and was added to the returned income as income from undisclosed sources. In appeal, the Commissioner of Income Tax (Appeals), Orissa, held that the matter needed further enquiry, and the assessment was set aside for giving a fresh finding regarding the genuineness of the loan. Petitioner No. 2 assailed the order of the Commissioner of Income Tax (Appeals) before the Tribunal in Appeal No. I. T. A. 260/CTK of 1983. The Tribunal held that the Commissioner of Income Tax (Appeals) was not justified in remanding the matter for further enquiry. An application u/s 254(2) of the Act was filed before the Tribunal, inter alia, on the ground that there were certain basic mistakes in the order of the Tribunal dated May 22, 1989, which required rectification. The application was numbered as M. A. No. 10/CTK of 1989. By order dated March 6, 1990, the application was rejected. Undaunted by such rejection, the assessee filed another application which was numbered as Miscellaneous Application No. 16/CTK of 1990. The prayer in this application was to exercise its powers u/s 254(2) of the Act and rectify alleged mistakes in the order dated March 6, 1990, passed in Miscellaneous Application No. 10/CTK of 1989. By the impugned order dated December 13, 1990, the prayer for rectification was accepted so far as assessability of the aforesaid sum of Rs. 50,000 was concerned. The Tribunal held that the conclusions contained in the order rejecting the earlier application for rectification were not germane to the subject-matter of the application and were not appropriate. 2. By the impugned order dated December 13, 1990, the prayer for rectification was accepted so far as assessability of the aforesaid sum of Rs. 50,000 was concerned. The Tribunal held that the conclusions contained in the order rejecting the earlier application for rectification were not germane to the subject-matter of the application and were not appropriate. 2. Learned standing counsel for the Department has submitted that the scope and ambit of Section 254(2) has not been kept in view by the Tribunal and, in reality, the Tribunal has reconsidered the appeal on merits which is not permissible. It is also urged that the second application for rectification was not maintainable in law. Learned counsel for the assessee, however, submitted that the factual aspects clearly indicate that the Tribunal, while disposing of the appeal and the first miscellaneous application for rectification, had not kept the correct facts and legal position in view and, therefore, the Tribunal was justified in allowing the second application filed u/s 254(2) of the Act. 3. Section 254(2) empowers the Tribunal to amend any order passed by it under Sub-section (1) with a view to rectify any mistake apparent from the record at any time within four years from the date of the order. Therefore, to attract the applicability of Section 254(2), the mistake which is sought to be rectified must be apparent from the record, and the same must be in any order passed under Sub-section (1) of Section 254. The order referred to in Section 254(1) is the one relating to an appeal filed by either the assessee or the Revenue. Section 254(1) reads as follows : " The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit." 4. The " appeal" referred to in the provision is one filed u/s 253. Therefore, the order which can be rectified must be one which has been passed by the Tribunal in an appeal filed u/s 253. In our view, an order rejecting an application for rectification u/s 254(2) is not available to be rectified u/s 254(2). The same may relate to an appeal, but it is not an order passed by the Tribunal under Sub-section (1) of Section 254. As indicated above, the assessee's application for rectification u/s 254(2) was rejected by the Tribunal. In our view, an order rejecting an application for rectification u/s 254(2) is not available to be rectified u/s 254(2). The same may relate to an appeal, but it is not an order passed by the Tribunal under Sub-section (1) of Section 254. As indicated above, the assessee's application for rectification u/s 254(2) was rejected by the Tribunal. The second application was for rectification of some alleged mistakes in the said order of rejection. Section 254(2) had no application to such an order. The Tribunal was not justified in purporting to act u/s 254(2) and passing the impugned order. In view of this, we do not think it necessary to deal with the submissions relating to the dispute whether there was any rectifiable mistake apparent from the record or not. 5. The writ application, accordingly, succeeds, and the impugned order (annexure-1) is set aside. No costs. S. K. Mohanty, J. 6. I agree.