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Issues:
1. Validity of canceling the assessment by the Appellate Tribunal. 2. Validity of the regular assessment for the assessment year 1970-71. Analysis: The case involved a public limited company acting as the agent of a non-resident company and the assessment year in question was 1970-71. The Income-tax Officer treated 75% of the sum paid by the assessee to the non-resident company for technical services as the income of the non-resident company arising in India. The Income-tax Appellate Tribunal, in a previous order, held that no assessment could be made on the assessee as the agent of the non-resident company. The Revenue raised two questions of law regarding the cancellation of the assessment and the validity of the regular assessment for the year in question. The High Court referred to previous judgments, including CIT v. Fertilizers and Chemicals (Travancore) Ltd., and directed the Income-tax Appellate Tribunal to dispose of the appeal afresh considering the earlier decisions. The High Court declined to answer the questions referred by the Income-tax Appellate Tribunal, citing previous judgments that highlighted the need to determine if the assessee had a business connection with the non-resident to be treated as an agent under section 163 of the Income-tax Act. The court emphasized that this determination was crucial before deciding on the validity of the orders passed by the Income-tax Officer and the assessments. The court directed the Tribunal to reexamine the matter for the assessment year 1970-71 in light of the previous decisions, specifically CIT v. Fertilizers and Chemicals (Travancore) Ltd. In conclusion, the High Court disposed of the reference by instructing the Income-tax Appellate Tribunal to reconsider the appeal for the assessment year 1970-71 based on the principles established in previous judgments. The court did not directly address the questions of law raised by the Revenue but emphasized the importance of determining the business connection between the assessee and the non-resident company before making any assessment decisions.
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