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TMI Blog1968 (10) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... 65, the Income-tax Officer, Companies Circle 1(3), Bombay, directed that for the purpose of the Income-tax Act, 1961, the Premier Automobiles Ltd--hereinafter called " the company "--be treated as an agent of M/s. Dodge Brothers of United Kingdom--a non-resident company. On the same day the Income-tax Officer issued a notice of demand under section 156 read with section 210 of the Act calling upon the company to pay on or before March 1, 1965, advance tax of Rs. 11,51,235.91 as agent of the foreign principal during the financial year 1964-65. The company then moved a petition in this court for an order quashing and setting aside the order under section. 163 and notice of demand under section 156, for the assessment year 1965-66 and for an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar assessment under this Act or under the Indian Income-tax Act, 1922, the Income-tax Officer may, on or after the 1st day of April in the financial year, by order in writing, require him to pay to the credit of the Central Government advance tax determined in accordance with the provisions of sections 207, 208 and 209." Sections 207, 208, 209 and 210 prescribe machinery for imposition of liability for and determination of the quantum of advance tax in respect of income which is chargeable to income-tax in the hands of a person on regular assessment. Under the Income-tax Act, 1961, a person is liable to be assessed to tax in respect of his own income, and also in respect of certain classes of income received by or accruing or arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable in respect of such income ". On regular assessment an agent of a non-resident is, by virtue of section 160(1) read with section 163, liable to be assessed to tax and the tax so assessed may be recovered from him. The agent, if assessed to tax, has the right to recover tax paid by him from the person whom he represents : section 162. Since a non-resident is in respect of income which forms part of his total income liable to be assessed to tax, he may also be called upon to pay advance tax in respect of the income accruing to or received by him which forms part of his total income chargeable to tax by virtue of sections 4.5 and 207. So far there is no dispute. Counsel for the company, however, urged that an agent of a non-resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcluding capital gains-if it is likely to exceed the maximum amount not chargeable to tax by two thousand five hundred rupees. These provisions apply to all assessees. If an assessee is chargeable to tax in respect of his own income or income of others which is chargeable to tax as his own income, those provisions indisputably apply. It is expressly enacted by section 161 that as regards income in respect of which a person is a representative assessee, he shall be subject to the same duties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him beneficially. It is clearly implicit therein that a representative assessee is not exempt from liability to pay advance tax. Of the liability to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act under which the liability to pay advance tax of a representative assessee depends upon determination of the total income for the previous year. An argument of hardship was also raised. It was said that an agent of a non-resident may not normally have in his possession any materials on which he may estimate the income in respect of which he may be chargeable to advance tax, if he has not been previously assessed to tax as an agent of a non-resident. That again, in our judgment, is not a ground which exempts an agent from liability to pay advance tax on behalf of his principal. Liability to submit an estimate necessarily implies the duty to secure the requisite information from the non-resident for submitting the estimate. The tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith section 208 the declaration that the company was an agent involved liability to pay advance tax as well as tax assessed on regular assessment. We are unable to hold that the liability to pay advance tax did not arise against the company. The plea that the provisions imposing liability to pay advance tax upon an agent of a non-resident infringe the equality clause of the Constitution has no substance. As already observed, the liability to pay advance tax arises under sections 207 and 208 and its quantum is determined by sections 209, 210 and 212(3), and it is not predicated of the accrual of liability that the total income of the previous year should be ascertained or precisely ascertainable when demand is made by the Income-tax Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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