Merger doctrine and treaty override bar revival of omitted tax ground once High Court has concluded the substantive liability.

Once the Tribunal's earlier order had merged in the High Court's appellate judgment, it had no jurisdiction to entertain a miscellaneous application seeking revival of an omitted additional ground. The High Court had already held, applying Article 7(1) of the India-Singapore tax treaty and section 90 of the Income-tax Act, 1961, that no further profits could be attributed to the foreign enterprise in India where the Indian agent was remunerated at arm's length. That treaty-based finding concluded the substantive tax liability, so the domestic-law ground had become infructuous. The miscellaneous application was therefore rejected.

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Issues: Whether the miscellaneous application seeking consideration of the omitted additional ground could be entertained when the Tribunal's earlier order had merged in the High Court's appellate order and the substantive tax issue stood concluded under the India-Singapore Double Taxation Avoidance Agreement.

Analysis: The Tribunal noted that the earlier order had merged with the High Court's order. The High Court had already held, relying on the principle that where the Indian agent had been remunerated at arm's length no further profits could be attributed to the foreign enterprise in India under Article 7(1) of the treaty, that the assessee had no further tax liability. Since the additional ground related to domestic-law taxability, while the High Court's ruling under the treaty overrode the domestic provisions by virtue of section 90 of the Income-tax Act, 1961, the issue had become infructuous. In those circumstances, the Tribunal had no jurisdiction to modify the merged order.

Conclusion: The miscellaneous application was not entertainable and was rejected.

Final Conclusion: The assessee succeeded in resisting the attempt to revive the omitted ground, as the Tribunal declined to interfere with an order already merged in the High Court's decision.

Ratio Decidendi: Once an appellate order has merged in a superior court's judgment, the lower forum cannot modify it in collateral proceedings, and a treaty-based finding that extinguishes the underlying tax liability renders the domestic-law issue infructuous.

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