Mistake apparent on record in DTAA analysis led to recall for fresh consideration of Article 7 taxability and computation basis.

The Tribunal considered whether its earlier order contained a mistake apparent from the record for treating Article 7 of the India-Mauritius DTAA as inapplicable and for not examining the assessee's liability under that article. The material controversy was whether, on the assumed applicability of Article 7, the assessee had a permanent establishment in India and whether the income could be assessed on a gross basis under Section 44B. The earlier order was said to have overlooked the real issue and treated the discussion of Articles 4, 5 and 7 as academic. The miscellaneous application was allowed and the order was recalled for fresh consideration on taxability under Article 7 and the correct basis of computation.

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Issues: Whether the Tribunal's earlier order contained a mistake apparent from the record in holding that Article 7 of the India-Mauritius DTAA was inapplicable and in declining to examine the assessee's liability under that article, warranting rectification and recall of the order for limited reconsideration.

Analysis: The authorities below had proceeded on the footing that Article 7 applied, and the controversy before the Tribunal was not whether Article 7 was attracted at all but whether, on that footing, the assessee had a permanent establishment in India and whether the income could be assessed on gross basis under Section 44B. The earlier order had gone behind an uncontested finding and treated the discussion of Articles 4, 5 and 7 as academic, though the real issue requiring determination was the effect of Article 7 on taxability and the basis of computation. That amounted to a mistake apparent on the record.

Conclusion: The miscellaneous application was allowed and the earlier order was recalled for the limited purpose of fresh decision on whether, even under Article 7 of the India-Mauritius DTAA, the assessee's income was taxable in India and, if so, on what basis.

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