TMI Blog1978 (4) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies including that from the respondent No. 1, for the assessment years 1969-70, 1970-71 and 1971-72. The income of the said Mr. Somerville was salary and pension for the assessment year 1969-70 and only pension for the assessment years 1970-71 and 1971-72. The respondent No. 1 preferred three appeals to the AAC, who affirmed the order of the ITO for the assessment year 1969-70 and dismissed the appeal. So far as the appeals relating to the assessment years 1970-71 and 1971-72 were concerned, the AAC held that the liability of the assessee-company for the assessment of the non-resident was limited only to those incomes in respect of which the assessee-company could be treated as a representative assessee, that is to say, only those incomes which the non-resident received through the assessee-company and not his other income. In that view of the matter, he deleted the pensions received by the non-resident from the Automatic Machines Co. (India) Pvt. Ltd. and Bell Punch (India) Pvt. Ltd. from the total income assessed on the assessee as an agent of the non-resident. Against the order of the AAC relating to the assessment year 1969-70, the respondent No. 1 preferred an appeal to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te at which the tax should be charged was the rate applicable to the income of the non-resident which he received through the respondent No. 1 as his agent and not the rate applicable to the total income of the non-resident including his income received through the respondent No. 1. Further it was contended that for the assessment years 1970-71 and 1971-72, there was no mistake apparent on the face of the record, and, accordingly, the ITO had no jurisdiction to exercise his power under s. 154 of the Income-tax Act, 1961, hereinafter referred to as " the Act." Sabyasachi Mukharji J., who heard the rule, upheld the contentions of the respondent No. 1 and set aside the impugned orders of the ITO. The rule was made absolute. Hence this appeal. The principal question involved in this appeal is that when an agent of a non-resident is assessed in respect of the income of the non-resident what the rate applicable to such income should be for the purpose of computation of tax. In other words, whether the rate should be that as applicable to the income of the non-resident in the hands of the agent or that applicable to the total income of the non-resident. S. 4 of the Act which deals with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate applicable to the total income of the assessee in the previous year. Thus, the total income of the assessee who is a representative-assessee cannot be any income other than that received by him on behalf of the non-resident during the previous year and, accordingly, the rate will be that applicable to such total income. It is, however, contended by Mr. Pal, learned advocate appearing on behalf of the appellants, that the latter part of s. 161 clearly indicates that the total income will be the income of the non-resident from all sources including the income received by him directly and also through the representative-assessee. It is submitted by him that if the latter part of s. 161 is not interpreted in the way suggested by him, it would be meaningless and nugatory. We are unable to accept this contention. It is true that the latter part of s. 161 provides, inter alia, that the tax shall be levied upon the representative-assessee in the like manner and to the same extent as it would be leviable upon the person represented by him, but that relates only to the income in respect of which he is a representative-assessee and not to any other income of the non-resident. It will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id two companies, on the ground of errors apparent on the face of the record. It has been laid down by the Supreme Court in T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50 that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by long drawn process of reasoning on points on which there may be conceivably two opinion. Further, it has been observed that a decision on a debatable point of law is not a mistake apparent from the record. It is not understandable how the ITO could take the view that he had committed a mistake which, in his opinion, was apparent on the face of the record, by not applying the rate applicable to the total income of the non-resident to the income which he received through his agent, that is, the respondent No. 1. Much argument has been advanced on behalf of either side as to what the rate in such cases should be and, on an interpretation of s. 161 and s. 4 of the Act, it has been found by us that the rate applicable to the total income of the non-resident cannot be taken to be the rate for the purpose of computation of tax on the income which has been received by the non-resident through ..... X X X X Extracts X X X X X X X X Extracts X X X X
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