TaxTMI 
TaxTMI 
2014 (8) TMI 6
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....vt. Ltd. In respect of the assessment year 2003-04 pertaining to the previous year ended on 31.03.2003, the said Mr Francis Daly had submitted his return of income which had been assessed by virtue of the assessment order dated 26.12.2006. From the assessment order dated 26.12.2006 pertaining to Mr Francis Daly, it is evident that his status has been shown as "individual" and his residential status has been indicated as -"R & OR" which means "Resident & Ordinarily Resident". 3. In other words, the said Mr Francis Daly was not a non-resident in respect of the previous year ended on 31.03.2013. It is an admitted position that Mr Francis who is no longer in the employment of the petitioner became a non-resident subsequently. 4. On 16.03.2010 a show cause notice was issued by the Assistant Commissioner of Income Tax, Mayur Bhawan, New Delhi to the petitioner for treating the petitioner as the representative agent under Section 163(1)(c) of the said Act in respect of the said Mr Francis Daly for the assessment year 2003-04. By virtue of the said show cause notice, the petitioner was asked to show cause as to why it should not be treated as a representative agent in respect of Mr F....
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....w taken by the Assistant Commissioner of Income Tax and held the petitioner to be the representative assessee insofar as Mr Francis Daly was concerned in respect of the assessment year 2003-04. It is this order dated 18.03.2013 which is impugned before us. 7. In the impugned order the assessee's objections are recorded in the following manner:- "ii) Assessee objects that provisions of sec. 160(1)(i) read along with sec. 163 of the Act does not apply to the present case. The assessee submits that provisions of sec. 160 read along with sec.163(1)(c) of the Act which lays down the mechanism for treating a person as a representative assessee restricts its purview in respect of a non-resident. The assessee further submits that Francis Daly was a resident within the meaning of sec. 6 of the Act for the assessment year concerned (A.Y. 2003-04) and had filed his return of income in that capacity. Therefore, by no stretch of imagination, CKI can be treated representative assessee in respect of Francis Daly for the subject assessment year." On this objection the Commissioner of Income Tax held as under:- "This objection of the assessee also does not hold any merit as it does not ....
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....agent of the non-resident, including a person who is treated as an agent under section 163; 10. He also drew our attention to Section 163 which, to the extent relevant, reads as under:- 163. (1) For the purposes of this Act, "agent", in relation to a non-resident, includes any person in India- (a) xxxx xxxx xxxx xxxx (b) xxxx xxxx xxxx xxxx (c) from or through whom the non-resident is in receipt of any income, whether directly or indirectly; (d) xxxx xxxx xxxx xxxx and includes also any other person who, whether a resident or non-resident, has acquired by means of a transfer, a capital asset in India: xxxx xxxx xxxx xxxx 11. Upon reading the said provisions Mr Syali submitted that a person could be taken to be a representative assessee only in respect of the income of a non-resident. What he meant by this was that the relevant period to be considered would be the period in which the income accrued and it had to be seen as to whether in that period the person in respect of whom the petitioner was sought to be made a representative assessee was a non-resident or not. He submitted that insofar as the assessment year 2003-04 is concerned, Mr Francis Dal....
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....poses of charging to tax the capital gain arising from such sale, exchange or transfer, be deemed to have a business connection, within the meaning of this section, which such person residing out of the taxable territories. 13. In Abdullabhai Abdul Kadar (supra), the assessee was appointed as a statutory agent under Section 43 for the year 1942-43 on 12.03.1945. The non-resident died on 26.03.1946 and the orders appointing the assessee as the statutory agent with regard to 1943-44, 1944-45 and 1945-46 were passed on 27.06.1946. The assessee therein had contended that inasmuch as the non-resident was dead, no order could be passed after his death appointing the assessee therein as a statutory agent. 14. The Bombay High Court speaking through M.C.Chagla, CJ, observed as under:- "The first question which has been argued by Sir Jamshedji on behalf of the assessee is that with regard to the assessment years 1943-44, 1944-45 and 1945-46 his client cannot be assessed as an agent under Section 43 in view of the death of the non-resident. Now, the facts which are necessary to be considered with regard to this contention are that the assessee was appointed a statutory agent under Se....
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....s right in appointing the assessee as a statutory agent on 27.06.1946 notwithstanding the fact that the non-resident had died on 26.03.1946. 16. Despite the fact that the learned counsel for the Revenue argued to the contrary, we feel that the same logic would apply in the present case also. The relevant accounting year is the previous year ending on 31.03.2003 which pertains to the assessment year 2003-04. At that point of time Mr Francis Daly was not a non-resident. Therefore, in relation to that accounting period the petitioner cannot be appointed as a representative assessee. This is notwithstanding the fact that subsequently Mr Francis Daly attained the status of a non-resident and that when he was a non-resident the notice under Section 163(2) were issued. We reiterate, the relevant period for consideration would be the relevant accounting period which in this case happened to be the year ending on 31.03.2003. 17. Section 160(1)(i) of the said Act makes it clear that the expression "representative assessee" has to seen "in respect of the income of a non-resident". It is obvious that when we construe the expression "income of a non-resident" it has reference to income in....