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TMI Blog1970 (3) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... d 74,793-5-3 became due and payable by the petitioner to its non-resident agents. The said sum of pound 74,793-5-3 was duly remitted by the petitioner to the non-resident agents, after obtaining the previous permission from the Reserve Bank of India. On the 5th January, 1967, the Income-tax Officer, Central Circle II, Calcutta, the respondent No. 1 herein, issued a notice to the principal officer of the petitioner-company in the following terms: " Re. Assessment-LT. 1962-63. On a scrutiny of the statements filed by you, it is evident that your sales are completed in India and it follows therefrom that the commission and other payments to the different non-resident concerns are received in India. They are, therefore, liable to Indian income-tax on such receipts. Since the income has been earned through activities with you, I propose to treat you as an agent, for the limited purpose of recovery under section 201 of the Income-tax Act, 1961, in respect of all the parties to whom, in the aggregate, payment of pound 74,793 was made. Your objection, if any, may please be stated, in writing, before January 17, 1967. " The petitioner preferred an objection to the aforesaid notice on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in clause (i) of sub-section (1) of section 9, the agent of the non-resident, including a person who is treated as an agent under section 163; ....." Section 161 provides as follows : (1) Every representative assessee, as regards the income in respect of which he is a representative assessee, 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, and shall be liable to assessment in his own name in respect of that income; but any such assessment shall be deemed to be made upon him in his representative capacity only, and the tax shall, subject to the other provisions contained in this Chapter, be levied upon and recovered from him in like manner and to the same extent as it would be leviable upon and recoverable from the person represented by him. (2) Where any person is, in respect of any income, assessable under this Chapter in the capacity of a representative assessee, he shall not, in respect of that income, be assessed under any other provision of this Act. " Section 163, in so far as is material for our purpose, provides, as follows : " (1) For the purposes of this A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, has wilfully failed to deduct and pay the tax. (2) Where the tax has not been paid as aforesaid after it is deducted, it shall be a charge upon all the assets of the person, or the company, as the case may be, referred to in sub-section (1)." The principal contention of Mr. Ginwalla, appearing on behalf of the petitioner, is that if a person is an " agent " or is treated as an " agent " under section 163 of the Act he is liable under section 161 of the Act to be assessed in respect of such income in his hands in his own name although in a representative capacity. This is made clear by section 160 which speaks of the agent of a non-resident as a " representative assessee ". In such cases, section 166 provides that the income-tax authorities may also directly assess and recover the tax from such person on whose behalf there may be an agent. Section 167 of the Act authorises the Income-tax Officer to have the same remedies against all properties of any kind vested or under the control or management of any representative assessee and gives him the same power as he would have against the property of any person liable to pay any tax whether the demand is raised against the represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Dipankar Gupta, appearing on behalf of the revenue, did not seriously contest the proposition that the same person cannot be treated as an agent under section 163 of the Act and proceeded with under section 201 at the same time. He, however, submitted that the income-tax authorities have not yet made up their minds as to whether the petitioner is to be treated as an agent under section 163 of the Act or is to be proceeded with as " any person " within the meaning of section 195 thereof. He submitted that a notice has merely been issued at this stage as part of the process of giving an opportunity to the petitioner of making its submissions. Mr. Gupta contended that making statements on propositions of law is no part of a notice which is a mere link in the chain of such an opportunity process. It should not be treated as an integral part of the notice. It is merely a tentative view of a quasi-judicial authority which may be corrected at a subsequent stage. He invited me to draw the analogy of judicial officers and even judges of this court who express certain views in the course of the hearing of a case which view may not ultimately prevail. According to Mr. Gupta, this applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred by with regard to the present assessment year in view of the of section 231 of the Act. This contention also was sought to be repelled by Mr. Gupta on behalf of the revenue. Lastly, Mr. Ginwalla relied on a circular being Circular No.17 (XXXVII-1) of 1953 dated the 17th July, 1953 which has been set out in paragraph 5 of the petition. It was contended that, in view of the circular, a foreign agent of an Indian exporter is not liable. to Indian income-tax. Mr. Gupta for the revenue contended that the circular cannot apply to agents-cum-buyers as in the present case. In any event, according to Mr. Gupta, the true legal character and the relation between the parties is a matter which requires investigation at a subsequent stage. In view of the fact that I am setting aside the impugned notices on the basis of which the proceedings have been initiated, I do not feel that it would be appropriate for me at this stage to pronounce any opinion on the merits of the other contentions of the petitioner which I have recorded above. I make it quite clear, however, that in the event of the income-tax authorities deciding to take fresh proceedings against the petitioner; it will be open to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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