1993 (5) TMI 47 - AT - Income Tax

Summary

Issues:
1. Whether the appellant was correctly treated as an agent of a non-resident company for the purpose of income tax assessment.
2. Whether the failure to issue a notice under section 163(2) of the Income Tax Act renders the assessment invalid.
3. Whether the absence of a formal order by the Income Tax Officer treating the appellant as an agent of the non-resident company affects the validity of the assessment.

Analysis:

Issue 1:
The Commissioner of Income-tax (Appeals) upheld the assessment treating the appellant as an agent of the non-resident company based on various submissions and documents provided during the assessment proceedings. The appellant contended that it was only a commercial agent and not appointed specifically for income tax purposes. However, the CIT (Appeals) found in favor of the Income Tax Officer, citing precedents and the appellant's own representations in forms filed. The Tribunal concurred, emphasizing that the appellant represented itself as an agent in the filed forms, and the issue of notice under section 163(2) was deemed procedural, not affecting the validity of the assessment.

Issue 2:
The appellant argued that the failure to issue a notice under section 163(2) deprived them of an opportunity to be heard, rendering the assessment invalid. The Departmental Representative contended that the appellant's own admissions as an agent negated the necessity for a notice. The Tribunal held that the appellant's representations in the filed forms established their status as an agent, making the notice and opportunity provisions procedural, not affecting the assessment's validity.

Issue 3:
The appellant asserted that the absence of a formal order by the Income Tax Officer treating them as an agent of the non-resident company rendered the assessment invalid, citing precedents requiring such an order for appeal rights. The Departmental Representative argued that evidence on record established the appellant's agency status, obviating the need for a separate order. The Tribunal emphasized that under the Income Tax Act of 1961, the right of appeal against such an order is provided, necessitating a written order recognizing the appellant as an agent. As no such order was passed, the Tribunal ruled in favor of the appellant, quashing the assessment.

In conclusion, the Tribunal allowed the appeal, holding that the assessment order was invalid due to the absence of a formal order treating the appellant as an agent of the non-resident company, as required under the Income Tax Act of 1961.