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2023 (12) TMI 343 - DELHI HIGH COURTRevision u/s 263 against assessee as an agent of the non-resident Monet Ltd.- Validity of order passed u/s 163 whereby the respondent/assessee was treated as an agent of the non-resident company - whether the CIT could have exercised powers against the respondent/assessee i.e., Cairnhill CIPEF Ltd. when the principal had ceased to exist? - HELD THAT:- As noticed by us, Monnet Ltd. ceased to exist on 19.12.2018, whereas, the CIT exercised its revisionary power much later i.e., on 31.03.2021. The other submission made that the revisionary power under Section 263 of the Act is directed towards the assessment order is also, in our view, an untenable submission for the reason that the assessment order is framed qua “an assessee”. In this case, the assessee was Monet Ltd. and before exercising the power under Section 263 of the Act, notice would have to be issued to Monet Ltd. and in some cases (where principal, perhaps, is not found available) to its agent by exercising powers under Section 163 of the Act. In this particular case, the record shows that it is not the appellant’s/revenue’s assertion that Monet Ltd. was not available. The record, however, indicated, as alluded to above, that Monet Ltd. had ceased to exist, therefore, the submission that the CIT could revise the assessment order dated 12.12.2018 when Moent Ltd. was not in existence, in our view, is untenable in law. The third submission made that the assessee i.e., Cairnhill CIPEF Ltd. would be liable only to the extent of the benefit it received i.e., by way of acquisition of shares of Mankind Ltd., is again, in our view, misconceived because it ignores the fact that under Section 163 of the Act, it is only when an entity/person is treated as an agent of a principal, which is in existence, such approach is acceptable in law. The arguments of Appellant in sum, veers around the proposition that Section 163 of the Act recognizes a person or an entity as an agent, irrespective of whether or not the principal is in existence. In the usual and normal course, the expression “agent” suggests that there is a principal in existence, on whose behalf the agent acts. The fact that an entity or a person is treated as an agent only buttresses this point of view. In our opinion, none of the submissions made persuade us that the impugned order requires interference. No substantial question of law.
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