Agent appointment for non-resident tax notices is required; notices must be served on the agent, not the non-resident.

Non-resident taxpayers are not proper addressees for assessment notices where the statute mandates treatment of an agent as the assessee; the agent, once appointed or treated as such after notice and hearing, is the person on whom notices and assessments must be made. The proviso allowing recovery from a non-resident's assets within India is a remedial enforcement measure and does not convert the principal into the assessee or allow routine service of notices on the non-resident absent appointment or treatment of an agent. Foreign analogies with differently worded statutes do not alter this construction.

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Issues: Whether, granting that the assessee was a non-resident, the Income-tax Officer was precluded by any provision of the Act from serving a notice on the non-resident without appointing an agent within the meaning of Section 43.

Analysis: Section 4(1) and the charging heads define income chargeable to tax in British India. Section 42(1) provides that profits or gains accruing to a person residing out of British India shall be chargeable to income-tax in the name of the agent, and that such agent shall be deemed to be the assessee for the purposes of the Act. Section 43 supplies a procedure by which a person may be treated as the agent of the non-resident after notice and an opportunity to be heard. The mandatory phrasing of Section 42(1) (using "shall") indicates that the agent, and not the non-resident principal, is to be treated as the assessee for purposes of issuing notices and assessment. The proviso to Section 42(1), permitting recovery of arrears from assets of the non-resident in British India, is a remedial or enforcement provision and does not convert the principal into the assessee or permit routine service of notices on the non-resident where an agent exists or may be treated as such under Section 43. Foreign authorities and English analogies addressing differently worded statutes do not alter the construction of the Indian provisions when read in their mandatory terms.

Conclusion: The Income-tax Officer is precluded from serving a notice on a non-resident in the absence of appointing or treating a person as agent under Section 43; decision is in favour of the assessee.

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