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2021 (8) TMI 1025 - AT - Income TaxProceedings u/s. 163 - TDS liability u/s 195 - agent of non-resident assessee - assesses being treated as agent of the non resident for assessment of income of that non-resident - remittances made by the assessee towards reimbursement of expenses that were incurred by the latter on behalf of the assessee - As argued CIT(A) has erred in not appreciating that proceedings u/s. 201 are for treating the assesses in default for failure to comply with the provisions of section 195 HELD THAT:- as the amounts remitted by the assessee company, viz. BIPL to Braitrim U.K have been held to be towards reimbursement of expenses (without any mark-up), therefore, in the absence of any ‘Income’ element therein involved the assessee, viz. BIPL could not be held to be a representative assessee within the meaning of Sec. 160(1)(i) qua the said remittances. Treatment of the assessee as Agent of non-resident and assessee in Default for non Deducting TDS u/s 195 - HELD THAT:- The Tribunal in [2010 (11) TMI 393 - ITAT, MUMBAI] has observed that as the liability of an assessee to deduct tax at source under s. 195 is different from the liability of an assessee to file a return of income as an agent of a foreign principal, therefore, the claim of the assessee that simultaneous proceedings cannot be taken, i.e holding the assessee as an assessee in default under Sec. 201; and at the same time passing an order under s. 163, holding the assessee as a representative assessee, did not merit acceptance. We do not find favor with the observation of the CIT(A) that as he had upheld the order passed against the assessee u/s 201 of the Act, therefore, having held so, there cannot be one more assessment in respect of the same income on the assessee pursuant to Sec. 163 of the Act. Pursuant to the amendment made available on the statute vide the Finance Act, 1987 w.e.f 01.06.1987 as the words “unless he is himself liable to any income-tax” in Sec. 195 stood omitted w.e.f 01st June, 1987, therefore, the innate exception carved out for a person who was himself liable to pay tax as an ‘agent’ of the non-resident person u/s 163 of the Act qua deduction of tax at source u/s 195 of the Act as per the pre-amended law i.e prior to 01.06.1987, had thereafter been dispensed with or in fact obliterated from the statute. We, thus, in terms of our aforesaid observations set-aside the view taken by the CIT(A) that as he had upheld the order passed against the assessee u/s 201 of the Act, therefore, having held so, there could not have been one more assessment in respect of the same income on the assessee pursuant to Sec. 163 Whether the assessee company, viz. BIPL could principally be held to be the ‘agent’ of Braitrim U.K u/s 163? - As observed by the ITO(IT)-TDS-3, Mumbai, that the assessee, viz. BIPL was to be held to be an ‘agent’ of Braitrim U.K u/s 163 of the Act for the reasons, viz. (i). that BIPL has a business connection with Braitrim U.K and its principal business is substantially controlled and managed over by Braitrim U.K ; (ii) that Braitrim U.K is directly or indirectly in receipt of income from or through BIPL; and (iii). that BIPL is the agent office managed on behalf of Braitrim U.K. Although, the assessee has assailed before the CIT(A) the aforesaid observations of the ITO(IT)-TDS-3, Mumbai, on the basis of which it was held to be an ‘agent’ of Braitrim U.K, however, we find that the CIT(A) by merely confining his adjudication to the aspect that the assessee could not have been subjected to double jeopardy under the two provisions of the Act i.e Sec. 201 and Sec. 163 of the Act, had thus, not dealt with the specific contentions that were raised by the assessee before him, therein, assailing its being treated as an ‘agent’ of Braitrim U.K under Sec. 163 of the Act. Also no contentions qua the aforesaid issue on merits i.e treating of the assessee as an ‘agent’ u/s 163 of the Act were advanced by the authorized representatives for both the parties in the course of hearing before us. As we have set-aside the view taken by the CIT(A) that having upheld the order passed against the assessee u/s 201 of the Act, the assessee could not be held to be an ‘agent’ of Braitrim U.K under Sec. 163 of the Act, therefore, in all fairness we restore the matter to the file of the CIT(A) for adjudicating by way of a speaking order the assessee’s claim on merits that it could not have been held to be an ‘agent’ of Braitrim U.K u/s 163.
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