D.R. SINGH, J.M.: With this order we shall dispose of miscellaneous application filed by assessee under s. 254(2) of IT Act, 1961 (in short Act ) for rectification of alleged mistake apparent from order dt. 20th Nov., 2007 passed in case of Van Oord ACZ India (P) Ltd. vs. Asstt. CIT, ITA No. 2126/Del/2007 for asst. yr. 2003-04 [reported at (2008) 114 TTJ (Del) 808 Ed.]. issue in dispute related to disallowance of reimbursement of mobilization/demobilization charges by assessee to M/s Van Oord ACZ Marine Contractors BV, Netherlands (VOAMC) to non-residents amounting to Rs. 8,65,57,909 under consideration, covered within provision of s. 40(a)(i) o f Act, on ground that assessee failed to deduct tax out of payments under s. 195 of Act. In this application it has been alleged that there were following apparent mistakes of fact and law which have inadvertently crept in order of Tribunal. First that Tribunal has stood to support its conclusion with reference to decision of apex Court in case of Transmission Corporation of A.P. Ltd. vs. CIT (1999) 155 CTR (SC) 489: (1999) 239 ITR 587 (SC) which has been referred to in extenso in order of Tribunal vide para No. 27. ratio of decision of apex Court (supra) has not been correctly applied by Bench while coming to conclusion in para No. 27 of order that requirement to deduct tax at source is absolute because on reading page No. 5 9 4 of judgment it would become clear that even as per aforesaid decision, requirement of deduction of tax at source under s. 195 was only in respect of sum which is chargeable to tax in India and could be assessed to tax under Act. In other words, application to deduct tax at source under said section is qualified by other requirement that sum should be liable to tax in India in hands of non-resident recipient. Second, in support of contention that there is no obligation to deduct tax at source under s. 195 of Act whether payment is not chargeable to tax in hands of non-resident recipient, assessee has referred to following judgments but while arriving at above conclusion decisions of co-ordinate Benches of Tribunal have not been considered: (i) Asstt. CIT vs. Modicon Network (P) Ltd. (2000) 14 SOT 204 (Del); (ii) Raymond Ltd. vs. Dy. CIT (2003) 80 TTJ (Mumbai) 120: (2003) 86 ITD 791 (Mumbai); (iii) Sonata Software Ltd. vs. ITO (2006) 6 SOT 700 (Bang); (iv) MPHASIS BFL Ltd. vs. ITO (2006) 9 SOT 756 (Bang); (v) Royal Airways Ltd. vs. Addl. Director of IT (2005) 98 TTJ (Del) 665: (2006) 98 ITD 259 (Del); (vi) NQA Quality Systems Registrar Ltd. vs. Dy. CIT (2005) 92 TTJ (Del) 946: (2005) 2 SOT 249 (Del); (vii) Wipro Ltd. vs. ITO (2003) 80 TTJ (Bang) 191; (viii) Asstt. CIT vs. Malayala Manorama Co. Ltd. (2005) 96 TTJ (Coch) 442: (2005) 94 ITD 121 (Coch). Third that Tribunal did not consider material fact that in case of VOAMC no income in respect of amount reimbursed by assessee was chargeable to tax, and tax, to extent deducted at source, was also refunded. If no income was held liable to tax in hands of VOAMC in respect of aforesaid reimbursement assessee could not be penalized by disallowing deduction of amount of reimbursement for failure to deduct tax in respect of amount which was not chargeable in hands of recipient in India. In view of these facts observation of Tribunal that it was not necessary to examine whether amount reimbursed by assessee to VOAMC was chargeable to tax in India for purposes of tax withholding under s. 195 of Act constituted mistake apparent from record which has vitiated conclusion reached by Tribunal. Fourth, Tribunal in para No. 35 of its order has observed that reimbursement of charges/payments to VOAMC were chargeable to tax in India but it has not given any reason for holding as aforesaid. In fact, Bench of Tribunal had in its earlier part of order stated that Tribunal was not going into merits of case to determine taxability or otherwise of amount reimbursed by assessee to VOAMC so these observations have been made by Tribunal without considering elaborate submissions of assessee on merits which are supported by case law regarding reimbursement made by assessee to VOAMC being not chargeable to tax in India and so no consideration of same constitutes mistake apparent from record. Fifth, Tribunal has not dealt with assessee s submissions regarding non applicability of provisions of s. 40(a)(i) of Act in view of non- discrimination provision contained in art. 24 of Indo-Netherlands Double Taxation Avoidance Treaty which overrides provisions of Act to extent more beneficial to non-resident assessee. Tribunal has not considered decision of Delhi Bench of Tribunal in case of Herbalife International India (P) Ltd. vs. Asstt. CIT (2006) 103 TTJ (Del) 78: (2006) 101 ITD 450 (Del) which squarely supports aforesaid contention. Hence, in view of this decision (supra) of Tribunal disallowance under s. 40(a)(i) of Act was not called for. Hence non-consideration of aforesaid decision constitutes mistake apparent from record which has vitiated conclusion arrived at by Tribunal. Thereafter, assessee has requested for rectification of order of Tribunal by asking same for consideration afresh. In support of his contentions learned Authorised Representative for assessee placed reliance on decision of apex Court in case of Honda Siel Power Products Ltd. vs. CIT (2007) 213 CTR (SC) 425: (2007) 295 ITR 466 (SC) wherein their Lordships held that non-consideration by Tribunal of decision of co-ordinate Benches of Tribunal cited at Bar, constitutes mistake and Tribunal is required to rectify its order under s. 254(2) of Act after taking into consideration order of co-ordinate Bench cited at Bar. In this very case their Lordships further observed that if any mistake apparent from record is brought to notice of Tribunal and prejudice has resulted to party on account of manifest mistake, error or prejudice has resulted to party on account of manifest mistake, error or omission on part of Tribunal, then Tribunal would be justified in rectifying its mistake. We have considered detailed submissions of both parties, perused record and carefully gone through relevant earlier order dt. 20th Nov., 2007 passed by Tribunal. In order to appreciate arguments of both parties we are required to look into scope and powers of Tribunal for recalling orders of Tribunal for rectifying mistakes alleged to have occurred in order of Tribunal. scope and powers of Tribunal under s. 254(2) of IT Act have been elaborately discussed by Hon ble apex Court and jurisdictional High Court of Delhi in following cases as under: In case of Honda Siel Power Products Ltd. vs. CIT (supra), their Lordships held as under: "Held, reversing decision of High Court, that in allowing rectification application Tribunal gave finding that earlier decision of co-ordinate Bench was cited before it but through oversight it had missed judgment while dismissing appeal filed by assessee on question of admissibility/allowability of claim of assessee for enhanced depreciation under s. 43A. One of important reasons for giving power of rectification to Tribunal under s. 254(2) was to see that no prejudice was caused to either of parties appearing before it. rule of precedent was important aspect of certainty in rule of law, and prejudice had resulted to assessee since precedent had not been considered by Tribunal. Tribunal was justified in rectifying mistake on record." In case of Karan & Co. vs. ITAT (2001) 169 CTR (Del) 361: (2002) 253 ITR 131 (Del) their Lordships of Hon ble jurisdictional High Court of Delhi, held as under: "The scope and ambit of application of s. 254(2) is very limited. same i s restricted to rectification of mistakes apparent from record. We shall first deal with question of power of Tribunal to recall order in its entirety. Recalling entire order obviously would mean passing of fresh order. That does not appear to be legislative intent. order passed by Tribunal under s. 254(1) is effective order so far as appeal is concerned. Any order passed under s. 254(2) either allowing amendment or refusing to amend gets merged with original order passed. order as amended or remaining unamended is effective order for all practical purposes. same continues to be order under s. 254(1). That is final order in appeal. order under s. 254(2) does not have existence de hors order under s. 254(1). Recalling of order is not permissible under s. 254(2). Recalling of order automatically necessitates rehearing and readjudication of entire subject- matter of appeal. dispute no longer remains restricted to any mistake sought to be rectified. Power to recall order is prescribed in terms of r. 24 of ITAT Rules, 1963, and that too only in case where assessee shows that it had reasonable cause for being absent at time when appeal was taken up and was decided ex parte. This position was highlighted by one of us (Justice Arijit Pasayat, Chief Justice) in CIT vs. ITAT (1992) 102 CTR (Ori) 281: (1992) 196 ITR 640 (Ori). Judged in above background order passed by Tribunal is indefensible." In their subsequent decision, in case of CIT vs. Vichtra Construction (P) Ltd. (2004) 191 CTR (Del) 423: (2004) 269 ITR 371 (Del), their Lordships by placing reliance on decisions CIT vs. ITAT (1992) 102 CTR (Ori) 281: (1992) 196 ITR 640 (Ori); Ms. Deeksha Suri vs. ITAT (1998) 146 CTR (Del) 576: (1998) 232 ITR 395 (Del); Karan & Co. vs. ITAT (supra) and Seth Madan Lal Modi vs. CIT (2003) 179 CTR (Del) 67: (2003) 261 ITR 49 (Del) again reaffirming above views of Hon ble Delhi High Court in case of Karan & Co. vs. ITAT (supra) held as under: "The words used in s. 254(2) are shall make such amendment, if mistake is brought to its notice . Clearly, if there is mistake, then amendment is required to be carried out in original order to correct that particular mistake. provision does not indicate that Tribunal can recall entire order and pass fresh decision. That would amount to review of entire order and that is not permissible under IT Act. power to rectify mistake under s. 254(2) cannot be used for recalling entire order. No power mistake under s. 254(2) cannot be used for recalling entire order. No power of review has been given to Tribunal under IT Act. Thus, what it could not do directly, could not be allowed to be done indirectly." In case of CIT vs. ITAT & Ors. (2006) 204 CTR (Del) 349: (2007) 293 ITR 118 (Del), their Lordships while examining scope and ambit of application of s. 254(2) of IT Act, 1961 have observed as under: "The scope and ambit of application of s. 254(2) of IT Act, 1961 is very limited. same is restricted to rectification of mistakes apparent from record. Power to recall order is prescribed in terms of r. 24 of ITAT Rules, 1963, and that too only in cases where assessee shows that it had reasonable cause for being absent at time when appeal was taken up and w s decided ex parte. What is significant is that section envisages amendment of original order of Tribunal and not total substitution thereof. order passed by Tribunal under s. 254(1) is effective order so far as appeal is concerned. Any order passed under s. 254(2) either allowing amendment or refusing to amend gets merged with original order passed. order as amended or remaining unamended is effective order for all practical purposes. same continues to be order under s. 254(1). That is final order in appeal. order under s. 254(2) does not have existence de hors order under s. 254(1)." Thereafter, their Lordships held as under: "Held, allowing petition, that Tribunal was not justified in recalling order passed by it in toto and setting matter down for fresh hearing. Just because pronouncement made on subject either by Tribunal or by any other Court was not noticed by Tribunal while taking particular view on merits of controversy may constitute error that would call for correction in appropriate appeal against order. Any such error may, however, fall short of constituting mistake apparent from record within meaning of s. 254(2). Just because point was debatable could hardly provide justification for recalling order and fixing appeal for de novo hearing. Therefore, order of recall passed by Tribunal was quashed." In case of CIT vs. Hindustan Coca Cola Beverages (P) Ltd. (2007) 207 CTR (Del) 119: (2007) 293 ITR 163 (Del), their Lordships while considering powers of Tribunal under s. 254(2) of IT Act, 1961 observed as under: "Under s. 254(2) of IT Act, 1961, Tribunal has power to rectify mistakes in its order. However, it is plain that power to rectify mistake is not equivalent to power to review or recall order sought to be rectified. Rectification is species of larger concept of review. Although it is possible that pre-requisite for exercise of either power may be similar (a mistake apparent from record), by its very nature power to rectify mistake cannot result in recall and review of order sought to be rectified. Where it is shown to Court in appeal that ground that has been specifically raised in memo of appeal before Tribunal has not been considered by it, that can persuade Court, if circumstances so justify, to remand case to Tribunal for consideration of that ground." In case of Ras Bihari Bansal vs. CIT & Anr. (2007) 293 ITR 365 (Del) their Lordships held as under: "Sec. 254 enables concerned authorities to rectify any mistake apparent from record . It is well settled that oversight of fact cannot constitute apparent mistake rectifiable under this section. Similarly, failure of Tribunal to consider argument advanced by either party for arriving at conclusion, is not error apparent on record, although it may be error of judgment. mere fact that Tribunal had not allowed deduction, even if conclusion is wrong, will be no ground for moving application under s. 254(2) of Act. Further, in garb of application for rectification, assessee cannot be permitted to reopen and reargue whole matter, which is beyond scope of this section." What emerges from decisions (supra) of Hon ble apex Court and jurisdictional High Court of Delhi for examining scope and ambit of application of s. 254(2) of IT Act can be summarized as under: First, scope and ambit of application of s. 254(2) of IT Act is restricted to rectification of mistakes apparent from record. Second, that no party appearing before Tribunal should suffer on account of any mistake committed by Tribunal and if prejudice has resulted to party, which prejudice is attributable to Tribunal s mistake/error or omission, and which error is manifest error, then Tribunal would be justified in rectifying its mistake. "rule of precedent" is important aspect of legal certainty in rule of law and that principle is not obliterated by s. 254(2) of Act and non-consideration of precedent by Tribunal causes prejudice to assessee. Third, power to rectify mistake is not equivalent to power to review or recall order sought to be rectified. Fourth, under s. 254(2) oversight of fact cannot constitute apparent mistake rectifiable under section. Fifth, failure on part of Tribunal to consider argument advanced by either party for arriving at conclusion is not error apparent on record, although it may be error of judgment. Sixth, even if on basis of wrong conclusion Tribunal has not allowed deduction it will not be ground for moving application under s. 254(2) of Act. Lastly, in garb of application for rectification under s. 254(2) assessee cannot be permitted to reopen and reargue whole matter as same is beyond scope of s. 254(2) of IT Act. Keeping in mind these guidelines issued by Lordships, now, we proceed to consider and dispose of miscellaneous application filed by assessee as under. In instant case Tribunal while deciding appeal of assessee vide order dt. 20th Nov., 2007 not only considered elaborate oral arguments advanced by Authorized Representatives of both parties but also took into consideration written synopsis filed before it. Generally main purpose of Tribunal for calling for written synopsis from parties is that nothing is ignored or any point in issue which was raised during course of arguments or which could not properly be noted by Tribunal in log book while hearing arguments of parties is left unconsidered/untouched. It means that it is always endeavour of Tribunal that while passing order it considers all arguments as well as written synopsis submitted by parties. Now reverting to order passed by Tribunal on 20th Nov., 2007, as well as averments of assessee for present miscellaneous application under consideration, we find that in para 4 of order Tribunal has reproduced case law submitted by assessee in written synopsis to support contention that there is no obligation to deduct tax at source under s. 195 of Act when payment is not chargeable to tax in hands of non-resident recipient . Whereas, assessee in support of this very contention has cited case law in miscellaneous application which has also been reproduced by us but same does not find any mention in written submissions filed by assessee at time of arguments in main appeal. Anyhow, assessee s contention raised in miscellaneous application is that case law submitted by assessee in support of above contention has not been considered by Tribunal while passing order, hence, there is mistake apparent in order of Tribunal which calls for rectification. In this regard, we would like to mention that in order Tribunal first meticulously mentioned arguments of learned Authorised Representative for assessee, points raised by him, then relevant case law relied upon by learned Authorised Representative for assessee in para Nos. 7 to 17 of order. Thereafter, Tribunal, while discussing all arguments raised by parties and after considering same and by recording reasons for arriving at conclusions, from paras 18 to 28 of order, summed up by deciding appeal of assessee in para Nos. 29 to 33 of order and same is reproduced hereinunder for ready reference: "29. To sum up, we may mention that neither it is duty nor it is desirable from payer/assessee to examine whether any tax is deductible at source from payments made to non-resident. In case it feels that tax is required to be deducted at source or required to be deducted at lower rate then it is required to obtain such certificate under s. 195(2) from ITO or for non- then it is required to obtain such certificate under s. 195(2) from ITO or for non- deduction of tax at source. This is safeguard provided under ss. 195(2), 195(3) and 197 to payer and payee because before AO while obtaining certificate such facts are required to be established by them. For non-compliance of statutory provisions of s. 195 by payer it would have to suffer consequences laid down by legislature under s. 40(a)(i) of IT Act. provision of s. 40(a)(i) has been enacted by legislature in its wisdom to ensure effective compliance of provisions of s. 195 of Act relating to TDS in respect of payments made to non-residents outside India. Thus provision mandates that no deduction for such payments made to non- residents outside India is to be allowed to payer/assessee while computing its income while considering its claim of deduction for such payments made to non-resident at time of assessment in case tax is not deducted at source from payment of such sums as per provisions of s. 195. With this enactment now duty is cast upon AO to not allow deduction to payer/assessee for such payments in cases where provisions of s. 195 are not complied with by payer while computing income of such payer assessee during course of assessment proceedings. Thus, in view of our detailed discussions and applying ratio of decision of apex Court in case of Transmission Corporation of A.P. Ltd. (supra) we conclude that it is not for assessee/payer to decide taxability of payments made by it in hands of non-resident recipient as machinery for this purpose was provided in sub-s. (2) of s. 195 itself, whereby concerned AO could have been approached to decide this aspect. That chargeability of income in hands of recipient non-resident to be taxed in India is separate issue and in absence of any certificate obtained from concerned AO under s. 195(2), it was obligatory on part of assessee to deduct tax at source from payments made to concerned non-resident. That payer/assessee having failed to deduct such tax as required by s. 195 payments made to recipient non-resident were liable to be disallowed as per specific provisions contained in s. 40(a)(i). That while deciding issue whether for such payments made to non-resident by payer/assessee deduction under s. 40(a)(i) could be allowed to payer or not. We are not required to look into nature of such payments made to non-resident nor are required to look into whether such payments are income or part of income in hands of recipient non-resident taxable in India and many other relevant factors relating to taxability of payments in hands of recipient non- resident as its income in India. That having held so detailed arguments of both parties on question of nature of payments made by payer to payee non-resident and taxability of such payment as income in hands of recipient non-resident is thus beyond scope of provisions of s. 40(a)(i) where we are only required to consider deduction of such payments claimed by payer/assessee to non-resident in case of non-compliance of provisions of s. 195 of IT Act i.e. non-deduction of tax at source for payments made to non-resident." Tribunal while passing order mainly made critical analysis of relevant provisions of IT Act by considering ratio of recent decision of apex Court in case of Transmission Corporation of A.P. Ltd. & Anr. vs. CIT (supra) while considering allowability of deduction under s. 40(a)(i) claimed by assessee. decision (supra) of apex Court was either not available to authorities deciding cases (supra) cited by assessee or was not considered by them while passing orders (supra) whereas Tribunal in instant case at p. 31 in para 33 of order recorded specific finding "that while deciding issue whether for such payments made to non-residents by payer/assessee deduction under s. 40(a)(i) could be allowed to payer or not. We are not required to look into nature of such payments made to non- residents nor are required to look into whether such payments are income or part of income in hands of recipient non-resident taxable in India and many other relevant factors relating to taxability of payments in hands of recipient non-resident as its income in India. Thereafter, Tribunal held that "having held so detailed arguments of both parties on question of nature of payments made by payer to payee non-resident and taxability of such payment as income in hands of recipient non-resident is thus beyond scope of provisions of s. hands of recipient non-resident is thus beyond scope of provisions of s. 40(a)(i) where we are only required to consider deduction of such payments claimed by payer/assessee to non-resident in case of non-compliance of provisions of s. 195 of IT Act i.e. non-deduction of tax at source for payments made to non-resident." Tribunal thereafter observed in para 33.1 why it did not consider arguments of parties on merits regarding nature of payments and taxability of same in hands of recipient as well as related case law relied upon by both parties. From order it is evident that order was passed by Tribunal in two parts, one for considering merits regarding nature of payments and taxability of same in hands of recipient non-resident company while considering issue of allowability of deduction under s. 40(a)(i), second, whether without considering first part i.e. merits Tribunal could decide issue of allowability of deduction under s. 40(a)(i) of IT Act claimed by assessee. We have already mentioned that Tribunal recorded finding that it could decide issue of deduction under s. 40(a)(i) by only considering relevant provisions and ratio of decision (supra) of apex Court elaborately discussing same in order. Hence it cannot be said that Tribunal has not considered case law cited by learned Authorised Representative for assessee as alleged in miscellaneous application, on contrary, Tribunal in order after taking note of case law (supra) relied upon by learned Authorised Representative for assessee gave reasoning why it was not relevant to consider same. Hence, ratio of decision of apex Court in case of Honda Siel Power Products Ltd. (supra) wherein their Lordships held that non consideration of decision cited by parties is mistake apparent from records is not applicable to facts of instant case because in order (supra) Tribunal considered case law cited by learned Authorised Representative for assessee and then in view of finding recorded observed that it was not relevant for Tribunal to consider same in view of detailed reasoning given in order. Similarly, other contentions of assessee raised in miscellaneous application since relate to issues of merits i.e. nature of such payments made by assessee to non-resident i.e. whether such payments are income or part of income in hands of non-resident taxable in India, for same reasoning as discussed hereinabove, were also not considered by Tribunal in its wisdom. averment of assessee that decision of apex Court in case of Transmission Corporation of A.P. Ltd. (supra) has not been correctly applied by Tribunal while coming to conclusion in para No. 27 of order, is not mistake apparent from record falling within scope of s. 254(2) of IT Act in view of ratio of decision of various High Courts as discussed by us hereinabove in this order as reconsidering same would amount to recalling and reviewing order and passing fresh order after reconsidering elaborate arguments advanced by parties. Lastly, in miscellaneous application assessee contended that in p r 35 of order Tribunal observed, that reimbursement of charges/payments to VOAMC were chargeable to tax in India but it has not given any reasons for holding as aforesaid ; in this regard we would simply like to clarify that in para 35(a) of order Tribunal has only mentioned observations of ITO recorded in order passed under s. 195(2) on 4th March, 2001 and 17th April, 2002 and same were simply reproduced but were not observations/findings of Tribunal. only mistake that occurred in order is in serial order given to paras and same is corrected as under. Now serial No. 35(b) which was part of serial No. 35(a) shall stand omitted and serial Nos. 35(c) and 35(d) shall now be read as 35(b) and 35(c) respectively. In view of observations made hereinabove in this order miscellaneous application filed by assessee stands partly allowed. *** VAN OORD ACZ INDIA (P) LTD. v. ASSISTANT COMMISSIONER OF INCOME TAX