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TMI Blog2014 (8) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... that when we construe the expression “income of a non-resident” it has reference to income in a particular previous year/accounting year. The income of that year must be of a non-resident. If that be so, the agent of the non-resident or the deemed agent under Section 163 of the said Act would be the representative assessee. The petitioner is not an agent of Mr Francis Daly. Section 163(1)(c) talks about the person from or through whom the non-resident “is in receipt of any income, whether directly or indirectly” – relying upon Abdullabhai Abdul Kader Versus Commissioner of Income-tax [1952 (3) TMI 33 - BOMBAY HIGH COURT] - the income bears reference to the accounting year for which the statutory agent is to be appointed – thus, the assessee cannot even be regarded as a deemed agent u/s 163(1)(c) of the Act - assessee cannot be considered to be the representative assessee of Mr Francis Daly in respect of the AY 2003-04 – Decided in favour of Assessee. - W. P. (C) 3588/2013 - - - Dated:- 22-7-2014 - Siddharth Mridul And Badar Durrez Ahmed,JJ. For the Petitioner : Mr. M. S. Syali, Sr. Advocate with Mr. Mayank Nagi, Ms. Husnal Syali Nagi and Mr. Harkunal Singh For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was submitted by the petitioner that it could not be treated as a representative agent under Section 163(1)(c) of the said Act and, therefore, the proceedings pursuant to the show cause notice dated 16.03.2010 ought to be dropped. However, the Assistant Commissioner of Income Tax did not agree with the submissions of the petitioner and passed an order dated 31.01.2011 and held as under:- 3. The reply of the assessee has been considered but it found that there is no merit in the reply. The Assessee indeed filed the return of income as resident but left the India and she enjoy the status of Non-resident as on date when the notice has been issued. As the notice has been issued not for the purposes of assessment proceedings, therefore, the contentions of the assessee that it will serve no purpose is invalid and there is no bar in the Income Tax Act, 1961 to issue the notice for the limited purpose of treating the Employer Company as Representative Assessee. Similarly no such limit time has been imposed in the Income Tax Act, 1961. The limit of 2 years imposed in treating the Representative Assessee pertains to issuance of notice u/s 148. Therefore, it is held that there is no mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the contention of the assessee that it will serve no purpose is invalid and there is no bar in the Income Tax Act, 1961 to issue notice for the limited purpose of treating the employer company as Representative Assessee. 8. The Commissioner of Income Tax ultimately recorded his findings as under:- 5. In the present case the issues pertaining to holding CKI as the representative assessee of Ms. Francis Daly under Section 163 of the Act has been examined objectively and in accordance with the law by the Assessing Officer. The applicant s submission that the notice under Section 163(2) of the Act is not valid because it is issued after the expiry two years is not acceptable as Section 149(3) lays down the time limit for issue of notice under Section 148 of the Act and not the notice under Section 163 of the Act. In its application under Section 264, the applicant has raised certain issues relating to two additions made on account of tax on the income of Francis Daly amounting to ₹ 39,20,157/- borne by the Co. and increasing the accommodation perquisite by ₹ 18,23,888/-. As these matters pertain to the assessment proceedings and not to the issue relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red was the accounting year in respect of the assessment year 2003-04. 12. Mr Syali drew our attention to a decision of the Bombay High Court in the case of Abdullabhai Abdul Kadar v. Commissioner of Income-tax: (1952) 22 ITR 241 (BOM.), wherein the provisions of Section 43 of the Income Tax Act, 1922 were considered. The provisions of Section 43 of 1922 Act and those of Section 163 of the said Act are substantially the same as would b e evident from the following extract from the said Section 43:- 43. Any person employed by or on behalf of a person residing out of the taxable territories, or having any business connection with such person, or through whom such person is in the receipt of any income, profits or gains upon whom the Income-tax Officer has caused a notice to be served of his intention of treating him as the agent of the non-resident person shall, for all the purposes of this Act, be deemed to be such agent: Provided that where transactions are carried on in the ordinary course of business through a broker in the taxable territories in such circumstances that the broker does not in respect of such transactions deal directly with or on behalf of a non-resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en one has to deal with a contractual agency, death of the principal brings the agency to an end. But under Section 43 we are dealing, not with a contractual agency, but with a statutory agency, and a statutory agent can be appointed under Section 43 provided the conditions laid down in that section are satisfied; and the conditions necessary are that any person employed by or on behalf of the person residing out of the taxable territories or having any business connection with such person or through whom such person is in the receipt of any income, profits or gains can be appointed a statutory agent. Now the employment contemplated, the business connection contemplated, and the receipt of income contemplated by this section are all within the accounting year. We are concerned here with business connection ; therefore, if there was a business connection in the year of account, a statutory agent can be appointed under Section 43, notwithstanding the fact that at the date of the appointment of the statutory agent the non-resident was not alive. The material and relevant period to consider is not the date of the appointment of the statutory agent, but the period covering the year of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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