Resident status key: petitioner not representative assessee. Orders set aside.

The Court held that the petitioner could not be treated as the representative assessee for Mr. Francis Daly as he was a resident during the assessment year 2003-04. The orders under challenge were set aside, and each party was directed to bear their own costs.

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Issues Involved:

1. Validity of the order dated 18.03.2013 passed by the Commissioner of Income Tax under Section 264 of the Income Tax Act, 1961.
2. Validity of the notice dated 16.03.2010 issued under Section 163(2) of the Income Tax Act, 1961.
3. Validity of the order dated 31.01.2011 passed by the Assistant Commissioner of Income Tax under Section 163(1)(c) of the Income Tax Act, 1961.
4. Interpretation of Sections 160(1)(i) and 163 of the Income Tax Act, 1961.

Detailed Analysis:

1. Validity of the Order dated 18.03.2013:

The petitioner challenged the order dated 18.03.2013 passed by the Commissioner of Income Tax under Section 264 of the Income Tax Act, 1961, which upheld the petitioner as the representative assessee for Mr. Francis Daly for the assessment year 2003-04. The Commissioner concurred with the Assistant Commissioner's view that the petitioner could be treated as a representative assessee despite Mr. Francis Daly being a resident during the relevant assessment year.

2. Validity of the Notice dated 16.03.2010:

The notice issued under Section 163(2) on 16.03.2010 sought to treat the petitioner as the representative agent of Mr. Francis Daly, who had been assessed as a non-resident. The petitioner contended that Mr. Francis Daly was a resident during the assessment year 2003-04 and, therefore, the notice was invalid. The Assistant Commissioner dismissed this contention, stating that the notice was issued for treating the employer company as a representative assessee and not for assessment purposes.

3. Validity of the Order dated 31.01.2011:

The Assistant Commissioner's order dated 31.01.2011 held the petitioner as the representative assessee for Mr. Francis Daly. The petitioner argued that since Mr. Francis Daly was a resident during the relevant assessment year, the petitioner could not be treated as a representative assessee under Section 163(1)(c). The Assistant Commissioner rejected this argument, emphasizing that the relevant period was the date of the notice issuance when Mr. Francis Daly was a non-resident.

4. Interpretation of Sections 160(1)(i) and 163:

The petitioner's counsel argued that under Section 160(1)(i), a person could be a representative assessee only for the income of a non-resident during the relevant assessment year. They cited the Bombay High Court decision in Abdullabhai Abdul Kadar v. Commissioner of Income-tax, which emphasized that the relevant period for considering the non-resident status was the accounting year, not the date of notice issuance. The Court agreed, stating that since Mr. Francis Daly was a resident during the year ending 31.03.2003, the petitioner could not be deemed a representative assessee for that period.

Conclusion:

The Court concluded that the relevant period for determining the non-resident status was the accounting year, not the date of notice issuance. Since Mr. Francis Daly was a resident during the assessment year 2003-04, the petitioner could not be treated as his representative assessee. The writ petition was allowed, and the impugned orders were set aside. The parties were ordered to bear their respective costs.

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