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TMI Blog2007 (3) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... ousing Land Development Trust Ltd. [1986] 161 ITR 524 and All India Reporter Ltd. v. Ramchandra D. Datar [1961] 41 ITR 446 (SC) and decision of Hon ble Bombay High Court in the case of Princess Maheshwari Devi of Pratapgarh v. CIT [1984] 147 ITR 258. The Ld. Counsel for the assessee pointed out that the Tribunal has erroneously held that US Model Convention is not relevant and has failed to consider the provision of OECD Model Commentary, which is similar to the provisions of the Treaty with the Netherland. He submitted that the finding of the Tribunal that there is no requirement of PE being in existence in the year in question is specifically contrary to the provisions of article 5(3) of the Treaty. The Ld. Counsel for the assessee submitted that this constitute mistake apparent from the record in the order of the Tribunal. He submitted that non-consideration of judgment stated before the Tribunal constitutes a mistake apparent from the record within the meaning of section 254(2) of the Act and relied on decision of Delhi Tribunal in Mohan Meakin Ltd. v. ITO [2004] 89 ITD 179 (Delhi)(TM) in support of his argument. He submitted that Tribunal has tried to create a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent from the record. The finding of the Tribunal that there is no requirement of P.E. being in existence in India in the year of receipt of income is not contrary to the provision of article 5(3) of the DTAA. Article 5(3) or any other article of the DTAA nowhere provides that there has to be a PE in existence in India in the year in which the income received by the assessee-company in India is sought to be taxed. The Tribunal in its order dated 29-3-2006 has recorded that it has considered the relevant articles of the DTAA between India and Netherland and has recorded a finding that there are only two conditions for taxing an amount received by the assessee in India which are that there should be a PE of the assessee in India and that the income should be attributable to the PE. The PE was admittedly in existence in India in the earlier assessment years 1995-96 and 1996-97 and that the income of Rs. 30.78 crores received by the assessee-company in the assessment year 2001-02 is attributable to the PE in India of the assessee-company. The Tribunal has also recorded its finding in the facts of the case that it cannot be said that the assessee was having no PE in India during the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any help to the case of the assessee wherein the main issue is regarding interpretation of various articles of the DTAA between India and Netherland and where the issue is that whether existence of PE in India in the year of receipt of income is necessary. We do not find force in the argument of the Ld. Counsel for the assessee that the Tribunal has committed a mistake apparent from the record by holding that US Model Convention is not relevant and has failed to consider the provisions of OECD Model Commentary, which is identical to the provisions of the DTAA. We find that the various articles of the treaty between India and Netherland and particularly articles 5 and 7 of the DTAA between India and Netherland were considered by the Tribunal in its order and in view of a specific treaty between the two countries namely India and Netherland, the Tribunal has given an observation that the US Model Convention is not much relevant to the issue before us relating to the DTAA between India and Netherland. The Tribunal in its order has nowhere observed that the provisions of section 176(3A) of the Act is not applicable to the facts of the case of the assessee. The Ld. counsel for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is not relevant. 5. The Tribunal has taken a conscious decision on the issues before it. The Tribunal has not created a new case by holding that existence of PE during the relevant year was not necessary for taxability of particular amount of income in the hands of the assessee-company. Only a superior court can go into the correctness or otherwise of judgment passed by the Tribunal. There is always a distinction between an error of judgment in the order of the Tribunal and mistake apparent from the record in the order. Hon ble Delhi High Court in a latest decision in the case of Honda Siel Power Products Ltd. ( supra ) held that non-consideration of case cited before the Tribunal is not a ground for rectification. In the case of CIT v. ITAT [1992] 196 ITR 590 , Hon ble Orissa High Court held that in order to attract the application of section 254(2), the mistake must exist and it must be apparent from the record. The power to rectify mistake does not cover the cases where the revision or review of the order is intended. A "Mistake" can be rectified under section 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elabor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal has no doubt made certain observations in regard to the levy of interest under section 158BFA being statutory in nature with no power vested in any authority or Tribunal to condone the same, but the very fact that the Tribunal has made those observations would not render valid the order of recall passed by it. The net result of the order made by the Tribunal continues to remain the same viz., the appeal has to be heard again simply because one of the issues decided by the Tribunal is debatable or the Tribunal has not noticed an earlier decision rendered by another Bench. Both these reasons were insufficient to justify the order of recall made by the Tribunal." In the case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 Hon ble Supreme Court observed that "A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long-drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record." In the case of Prakash Chand Mehta v. CIT [1996] 220 ITR 277 , Hon ble Madhya Pradesh High Court held "that the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long-drawn process of reasoning on points on which there may conceivably be two opinions. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. The Tribunal cannot, in the exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion." In the case of Smt. Baljeet Jolly v. CIT [2001] 250 ITR 113 Hon ble Delhi High Court held that where an error is not self-evident it ceases to be an apparent error, the so-called inaccuracies or wrong recording of facts as alleged were not patent mistake which constitute the sine qua non for exercise of power under section 254(2) of the Act. Respectfully following the decisions of the Hon ble High Courts including that of the Hon ble Jurisdictional High Court and the decision of the Hon ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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