Assessment-year specific agency under income tax law cannot extend to later years without fresh statutory appointment.

A statutory appointment of an agent under section 43 of the Indian Income-tax Act, 1922 is confined to the assessment year for which it is made. The Act treats each assessment year as separate, so agency status does not automatically continue into a later year. Advance tax under section 18A relates to the tax liability of the subsequent assessment year, and liability for that year cannot be imposed on a person as statutory agent without a fresh notice, hearing, and order under section 43. On that basis, the demand for advance tax against the respondent for the later year was held invalid and the notices were quashed.

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Issues: Whether an appointment of a person as an agent of a non-resident under section 43 of the Indian Income-tax Act, 1922 for one assessment year authorises the Income-tax Officer to treat that person as agent for a subsequent assessment year and demand advance tax under section 18A for that later year without a fresh notice, hearing, and order under section 43.

Analysis: The appointment under section 43 is confined to the assessment year for which it is made. The scheme of the Act treats each assessment year as self-contained, and the vicarious liability of an agent does not automatically carry over to another assessment year. The expression "for all purposes" in section 43 operates only within the assessment year in respect of which the appointment is made, including imposition, quantification, and recovery of tax for that year. Advance tax under section 18A, though collected during the financial year, is imposed in relation to the tax liability of the subsequent assessment year. In the absence of a fresh notice, opportunity of hearing, and order under section 43 for the later assessment year, the person cannot be treated as the statutory agent for that year.

Conclusion: The demand for advance tax for the subsequent assessment year, treating the respondent as agent without a fresh appointment under section 43, was invalid. The notices were rightly quashed, and the appeals failed.

Ratio Decidendi: A statutory agency appointment under section 43 of the Indian Income-tax Act, 1922 is assessment-year specific and cannot be used to impose liability for a different assessment year unless a fresh statutory appointment is made after notice and hearing.

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