ORDER N.V. VASUDEVAN, J.M. This is miscellaneous application filed by assessee under s. 254(2) of Act praying that order dt. 14th July, 2005 passed by this Tribunal in aforesaid appeal be recalled and patent mistakes in order be rectified. 2 . Before adverting to various mistakes pointed out in this miscellaneous application, in order of Tribunal, it is necessary for us to give background of past history of appellant. appellant is non- resident company incorporated in France. It entered into contract with ONGC of India. appellant as per agreement was to provide technicians for exploration of oil and gas offshore India. Through technicians appellant provides technical services on jack up rigs owned by ONGC. In asst. yrs. 1 98 4-85 to 1 98 6-87 question arose as to whether salary which appellant pays to expatriate employees who work on ONGC jack up rigs was chargeable to tax in India and consequently was there obligation on part of appellant to deduct tax at source in case of Boudier Christian vs. ITO (1993) 46 ITD 114 (Del) which was case of expatriate employee employed with appellant. Tribunal held that appellant herein did not have fixed place of business in India or had any permanent establishment in India. Tribunal also held that payment which appellant receives from ONGC was in nature of fees for rendering technical services and was not in nature of industry or commercial profits. As natural corollary to aforesaid conclusion, Tribunal also concluded that salary which appellant paid to expatriate employees was not chargeable to tax in India as per art. 14(2) of DTAA between India and France. In case of several other expatriate employees of appellant Tribunal had followed order in case of Boudier Christian (supra). Allahabad High Court had also confirmed these orders of Tribunal. 3. In income-tax proceedings of appellant for asst. yr. 1 98 4-85, which are different from proceedings referred to above, which were in relation to non-deduction of tax at source by appellant from salaries paid to expatriate employees, Hon ble Tribunal in ITA No. 5032/Del/1 98 9 following ruling in case of Scan Drilling Company in ITA No. 6147/Del/1 98 7 had concluded that receipts by appellant were to be assessed under s. 44BB of Act and not under s. 44D r/w s. 115A of Act. decision in Dy. CIT vs. ONGC as Agent of Foramer France (2001) 71 TTJ (Del) 570 : (1999) 70 ITD 468 (Del) was one such decision. 4 . CBDT issued Instruction No. 1862, dt. 22nd Oct., 1990, whereby they recognized activity of imparting training and carrying out drilling operations for exploration or exploitation of oil and natural gas as mining operation within meaning of Expln. 2 to s. 9(1)(vii) of Act and consequently payments for such services were directed to be brought to tax under provisions of s. 44BB of Act. 5. In background of aforesaid facts appellant filed its return of income for asst. yr. 1 98 8-89. During financial year 1 98 7-88 relevant to asst. yr. 1 98 8-89 company had executed three contracts for ONGC : (i) Drilling operations by employing its own rig Ile D Amsterdam. (ii) Manning and management services for supervision or drilling activities carried on by ONGC on its own rigs : (a) Sagar Vijay, (b) Sagar Bhushan. In respect of expatriates deputed for business operations on jack up IDA owned and deployed by Foramer in India, tax was duly deducted at source from t h e salaries and paid under IT Act, as proceeds of contract were business profit receipts computed as per art. III of Indo-French Tax Avoidance Treaty and salary paid to expatriates was claimed as deductible expenditure. In respect of expatriates deputed under manning and management contracts for services rendered on ONGC rigs Sagar Vijay and Sagar Bhushan, exemption was claimed in respect of French expatriates whose stay in India did not exceed 183 days during previous year. 6 . Article 14 of Double Tax Avoidance Treaty between India and France provided as under : (i) Subject to provisions of art. XII, salaries, wages or other similar remuneration for services as employee performed in one of Contracting States by individual who is resident of other Contracting State may be taxed only in Contracting State in which his service is rendered. (ii) Notwithstanding provisions of para (1) of this article, salaries, wages or other similar remuneration paid to individual who is resident of one of Contracting States for services performed in that other Contracting State shall not be subjected to tax in that other Contracting State and may be subjected to tax in former Contracting State, if : (a) He is present in that other Contracting State for period or periods not exceeding in aggregate 183 days in taxable year concerned, and (b) remuneration is paid by or on behalf of employer who is not resident of that other Contracting State, and (c) remuneration is not deducted in computing profits of PE chargeable to tax in that other Contracting State. 7. assessee while filing return of income for asst. yr. 1 98 8-89 specifically made distinction between drilling operation through its own rig Ile D Amsterdam which was considered by it as business operation carried on in India and chargeable to tax under art. III of DTAA with France. It also highlighted fact fees received that in respect of manning and management of ONGC s drillships Sagar Vijay and Sagar Bhushan were in nature of fee for technical services which could be charged to tax only under art. XIV of treaty. computation of taxable income filed by assessee was as follows : Profits/Gains of Rs. Rs. business or profession Net loss/profit as per P&L account (a) Drilling operations through company s rig Ile 9,86,78,875 D Amsterdam Less : Depreciation 13,48,73,995 3,61,95,120 considered separately (b) Manning & management of ONGC drillship Sagar Vijay 2,45,82,816 Profit as per P&L a/c Add : Depreciation 47,859 2,46,30,675 considered separately (c) Manning & management of ONGC 1,34,93,866 drillship Sagar Bhushan Profit as per P&L a/c 7,799 1,35,01,665 Add : Depreciation 7,43,27,460 considered separately Less : Depreciation 13,49,29,653 as per IT Rules Net loss/depreciation 6,06,02,193 carried forward Note : 1. company is non-resident French company. During year ended 31st March, 1 98 7, company s activities consisted of (a) drilling operations performed through its own rig, Ile D Amsterdam, under contract dt. 17th Oct., 1 98 6 with ONGC; and (b) manning and management of drillship of ONGC Sagar Vijay under contract dt. 24th March, 1 98 7, (c) manning and management of ONGC drillship Sagar Bhushan under contract dt. 23rd March, 1 98 7. 2. company being French company, provisions of DTAA between India and France are applicable. Under art. III of treaty, tax can be charged only on net income derived by company through PE situated in India. Even fees for technical services can be charged to tax only on net income as per art. XVI of treaty. 3. provisions of Indo-French treaty override provisions of IT Act, 1961, including ss. 44BB and 44D. As per treaty, tax can be charged only on net profit, if any, derived from operations in India. There being net loss, company is not subject to any tax in India and it is claimed that tax amounting to Rs. 1,76,56,052 deducted at source by ONGC on payments made to company be refunded. 4. Even under IT Act unabsorbed depreciation of last year Rs. 9,55,59,728 is available for set off against income in current year as per provisions of ss. 71 and 72 of IT Act, 1961. 8. It is also pertinent to mention that return of income for asst. yr. 1 98 8-89 was filed by appellant on 5th Sept., 1 98 8. At this point of time there was dispute as to whether consideration received was to be considered as fees for technical services or business income under s. 44BB. decision in Scan Drilling s case (supra) was rendered in June, 1 98 8. CBDT issued its Instruction No. 1862, dt. 22nd Oct., 1990. order i n case of Boudier Christian (supra) was passed on 13th May, 1991. Tribunal applied provisions of s. 44BB of Act to fees for technical services on proceeds of management and manning, drilling contracts received by assessee in asst. yr. 1 98 4-85 on 16th March, 1995 and in asst. yrs. 1 98 5-86 and 1 98 6-87 on 29th Oct., 19 98 . 9 . While completing assessment in case of appellant AO applied 10 per cent of gross proceeds of manning and management contracts instead of fees for technical services. AO did so in view of CBDT Instruction as well as decision in Scan Drilling s case (supra) by Tribunal. order of AO was dt. 26th Feb., 1991. 10. Because of application of provisions of s. 44BB stand of Department has been that remuneration paid to expatriate employees has been deducted in computing proceeds of PE chargeable to tax in India within meaning of art. 14(2) of DTAA with France and, therefore, condition laid down in art. 14(2)(c) was not fulfilled and, therefore, salaries paid to expatriates were chargeable to tax and, therefore, appellant was obliged to deduct tax at source on such salaries paid to expatriates. 11. Tribunal after hearing parties came to conclusion that since s. 44BB is deeming provision and, therefore, expenditure on account of salaries is deemed to have claimed by assessee and consequently exemption of taxation of salary of expatriate employees under art. 14(2)(e) was held not applicable and, consequently, salaries paid to expatriates were held to be income chargeable to tax in India and consequently appellant was considered as assessee-in-default in not deducting tax at source. Tribunal has also further concluded that deeming fiction is to assume all facts and circumstances which are incidental or inevitable corollaries to give effect to legal fiction. 1 2 . In this miscellaneous application assessee has pointed out as many as 15 mistakes which were mistakes of facts as per record of case. 1 3 . We have considered arguments of learned counsel for assessee who took us through various mistakes pointed out in miscellaneous application. learned counsel for assessee summed up his conclusions as follows : (a) There is manifest error on assumption of facts contrary to evidence and inadvertent misreading of judicial decisions in appellant s own cases. (b) On account of factual inaccuracy, inference has been drawn by holding that cited Tribunal decisions and High Court decisions are distinguishable and are not applicable which has been erroneously disregarded. (c) That decisions in appellant s own cases both for corporate taxation as well as taxation of expatriates are squarely applicable and are binding. But inadvertently not following binding decision is mistake apparent on record. [Asstt. CIT vs. Saurashtra Kutch Stock Exchange Ltd. (2003) 183 CTR (Guj) 364 : (2003) 262 ITR 146 (Guj)] (d) That judicial propriety is to be adopted in following binding decision of jurisdictional High Court and various decisions of Tribunal, Delhi Bench in appellant s own cases, which has been accepted by Department for asst. yrs. 1 98 4-85, 1 98 5-86 and 1 98 6-87 and, therefore, legally can neither be disregarded nor deviated on similar facts : Reliance was placed on following decisions : (i) Agarwal Warehousing & Leasing Ltd. vs. CIT (2002) 177 CTR (MP) 15 : (2003) 257 ITR 235 (MP); (ii) Berger Paints India Ltd. vs. CIT (2004) 187 CTR (SC) 193 : (2004) 266 ITR 99 (SC); (iii) CIT vs. L.G. Ramamurthi & Ors. 1977 CTR (Mad) 416 : (1977) 110 ITR 453 (Mad); (iv) CIT vs. S. Devraj (1969) 73 ITR 1 (Mad). (e) That this petition is not review petition but petition for rectification of substantive glaring and obvious mistake and that Hon ble Tribunal has full power to recall its order for rectification of apparent mistakes as held in : (i) Seth Madan Lal Modi vs. CIT (2003) 179 CTR (Del) 67 : (2003) 261 ITR 49 (Del) (ii) CIT vs. Mool Chand Shyam Lal (2004) 190 CTR (All) 332 : (2005) 273 ITR 160 (All) (iii) Champalal Chopra vs. State of Rajasthan (2002) 177 CTR (Raj) 234 : (2002) 257 ITR 74 (Raj). 14. learned Departmental Representative opposed miscellaneous application contending mistakes pointed out in miscellaneous application are not mistakes which are apparent on face of record. According to him, Tribunal does not have power to recall its order and in this regard relied on decision of Hon ble Delhi High Court in case of Karan & Co. vs. ITAT (2001) 169 CTR (Del) 361 : (2002) 253 ITR 131 (Del). 15. Before going into various mistakes pointed out in miscellaneous application, we deem it just and proper to highlight manner in which assessee had drawn up its P&L a/c. copy of combined P&L a/c for year ending 31st March, 1 98 8 had been filed in paper book which is at p. 36. Perusal of same reveals that receipts from carrying out manning and management contracts rendered on ONGC rigs Sagar Vijay and Sagar Bhushan have been shown at Rs. 2,90,45,875 and 1,57,12,576, respectively. total of receipts from these two services was Rs. 4,47,58,451. As against these receipts certain expenses have been claimed in P&L a/c. Under head "Salaries of expatriates" nothing has been claimed as deduction. In respect of salaries of expatriates who had worked on appellant s own rig viz., Ile D Amsterdam, assessee had claimed salaries of expatriates. There is no dispute that tax at source has been deducted in respect of these salaries. It is further seen from order of assessment passed in case of appellant for asst. yr. 1 98 8- 89 that 10 per cent rate of profit has been applied on total receipts from Sagar Vijay and Sagar Bhushan totalling to Rs. 4,47,58,457 and taxable profit of Rs. 44,75,845 has been determined. From these documents it is apparent that salaries of expatriates with reference to Sagar Vijay and Sagar Bhushan had not been claimed by appellant. It is, therefore, clear that while computing profits of PE in India, remuneration paid to expatriates had not been deducted while arriving at profits. Tribunal while passing its order has, however, gone by deeming fiction of all expenses having been duly allowed while applying presumptive rate prescribed under s. 44BB of Act overlooking above fact. This presumption is not warranted. This factual misconception has vitiated conclusions drawn by Tribunal, consequent conclusions arrived at by Tribunal holding that conditions mentioned in art. 14(2)(c) of DTAA were not fulfilled requires reconsideration. There have been several factual errors which have been highlighted in miscellaneous application. Considering various factual inaccuracies pointed out in miscellaneous application and ultimate inference drawn by Tribunal, we are of view that order of Tribunal deserves to be recalled and appeal deserves to be disposed afresh in accordance with law. Such course in our view will meet ends of justice in present case. Hon ble Allahabad High Court in case of Mool Chand Shyam Lal (supra) has also held that where there are certain factual aspects which are recorded incorrectly by Tribunal it is fit case where appeal deserves to be decided afresh. We, therefore, recall order dt. 14th July, 2005 and direct that appeal be heard and decided afresh. *** PRIDE FORAMER S.A. v. ASSISTANT COMMISSIONER OF INCOME TAX