Rectification under section 254(2) fails where a treaty interpretation challenge is really an attempt to seek review.

A rectification application under section 254(2) was rejected because the alleged non-consideration of Article 7(3) of the India-UK DTAA was not a mistake apparent from the record. The Tribunal held that its earlier reasoning on attribution of profits to the permanent establishment had already examined the treaty provisions, including the appellate discussion of Article 7(3), and had interpreted Article 7(1) as incorporating the force of attraction rule through the words "directly or indirectly attributable." The challenge was treated as an attempt to reargue treaty interpretation, which amounts to review rather than rectification. The miscellaneous application therefore failed and the earlier order remained undisturbed.

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Issues: Whether the Tribunal's earlier order suffered from a mistake apparent from record on account of alleged non-consideration of Article 7(3) of the India-UK DTAA while deciding attribution of profits to the permanent establishment, so as to justify rectification under section 254(2) of the Income-tax Act, 1961.

Analysis: The application for rectification was founded on the contention that the Tribunal had applied the force of attraction principle under Article 7 of the treaty while overlooking Article 7(3), which specifically dealt with indirect attribution of profits. The Tribunal examined its earlier reasoning and the material before it, including the order of the Commissioner (Appeals), and noted that Article 7(3) had been reproduced and dealt with at the appellate stage. The Tribunal had considered the legal position, rejected the relief granted by the Commissioner (Appeals), and held that the expression "directly or indirectly attributable" in Article 7(1) incorporated the force of attraction rule. The alleged error required reappraisal of the treaty interpretation and would amount to review rather than rectification.

Conclusion: No mistake apparent from record was shown, and rectification under section 254(2) was not warranted.

Final Conclusion: The miscellaneous application failed, and the earlier Tribunal order remained undisturbed.

Ratio Decidendi: A rectification application cannot succeed where the alleged omission is, in substance, a challenge to the Tribunal's considered interpretation of the governing treaty provisions, and a mistake apparent from record is not made out by seeking a review of that conclusion.

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