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TMI Blog1937 (11) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 72,928 and determined that the tax payable thereon was ₹ 6,837. This assessment order was made upon the respondent firm whose name and style is Nawal Kishore Kharaiti Lal and who carry on business as Jewellers at Delhi, but it was made upon them as agent for a Hindu undivided family resident in the State of Jaipur outside British India. One Seth Banji Lal had been head of this family, but had died in December 1928. The validity of this assessment order is in substance the matter in dispute between the parties, but the case comes before their Lordships as an appeal by special leave from the judgment of the High Court upon a reference made under Sec. 66 of the Act formulating three questions of law for the High Court's decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income-tax in the name of the agent of any such person, and such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such income-tax: Provided that any arrears of tax may be recovered also in accordance with the provisions of this Act, from any assets of the non-resident person which are, or may at any time come within British India . 43. Any person employed by or on behalf of a person residing out of British India, or having any business connation 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Seth Banji Lal. About a year later, namely on 5th April 1929 a notice under Sec. 23(2) of the Act was sent to the respondent firm as agent for Seth Banji Lal requiring them to attend at the Income-tax Officer's Office and to produce evidence in support of the return which they had rendered. This notice specified for the year 1926-27 as well as 1927-28. Nothing appears to have been done under this notice for two years afterwards, a fact which may be explained by the circumstance that the assessment in respect of previous years was being disputed. On 5th May 1931, however, two things happened. The respondent firm filed a fresh return in respect of the year 1926-27 showing a sum of ₹ 51,550 as interest on loans payable by them to Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered illegal by the fact that the notice which the Income-tax Officer served on the firm under the Proviso to Sec. 43 did not mention any particular year for which the Income-tax Officer proposed to treat the firm as an agent. (3) Whether proceedings could be started under Sec. 34 of the Act against the petitioner as agent of the non-resident in view of the fact that action under that section was time-barred, more than one year having lapsed since the issue of the notice, dated 2nd February 1928? As required by the Act, the Commissioner gave his opinion on each question, answering each against the respondent firm namely (1) Yes : (2) No : (3) Yes: The High Court (Addison and Sale, JJ.) answered the first and third questions in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be required to render a return of B's income until it has first been decided that he is agent of B: on the other hand, having regard to the circumstances which for this purpose constitute agency, it may well be thought advisable that the information afforded by a return and by books of account produced in support thereof should be available for the purpose of deciding as to agency. The avoidance of delay may also be a consideration, the matter must be determined entirely upon the language of the Act, and their Lordships cannot find that it imposes the technical requirements upon which the High Court have insisted. It seems to their Lordships to be open to the Income-tax Officer under the Act to postpone any final determinatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s responsibility if he be agent, is another matter. If by notice given in due course, under Sec. 22(2) the year or years be specified he has no grievance in point of procedure and he can make his case upon the merits. No question of law arises upon the controversy as to agency. At the hearing it was desired by learned counsel for the respondent firm to contend that his clients should not have been assessed upon the figure of ₹ 72,928, which includes interest payable to the nonresident by third parties in British India, but only upon the figure of ₹ 51,550 which was payable by the respondent firm. No such issue can be brought within any of the three questions referred by the Commissioner to the High Court nor has it been discu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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