TaxTMI 
TaxTMI 
1968 (10) TMI 1
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....ed a notice of demand under section 156 read with section 210 of the Act calling upon the company to pay on or before March 1, 1965, advance tax of Rs. 11,51,235.91 as agent of the foreign principal during the financial year 1964-65. The company then moved a petition in this court for an order quashing and setting aside the order under section. 163 and notice of demand under section 156, for the assessment year 1965-66 and for an injunction prohibition restraining the Income-tax Officer from enforcing or implementing the order under section 163 and the notice under section 156 read with section 210 of the Income-tax Act, 1961. The petition was resisted by the Income-tax Officer. In support of the petition counsel for the company raised tw....
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.... Sections 207, 208, 209 and 210 prescribe machinery for imposition of liability for and determination of the quantum of advance tax in respect of income which is chargeable to income-tax in the hands of a person on regular assessment. Under the Income-tax Act, 1961, a person is liable to be assessed to tax in respect of his own income, and also in respect of certain classes of income received by or accruing or arising to others. He is also liable to be assessed to tax as a representative assessee. That is expressly so enacted by section 161(1), which provides: " Every representative assessee, as regards the income in respect of which he is a representative assessee, shall be subject to the same duties, responsibilities and liabilities ....
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....ts : section 162. Since a non-resident is in respect of income which forms part of his total income liable to be assessed to tax, he may also be called upon to pay advance tax in respect of the income accruing to or received by him which forms part of his total income chargeable to tax by virtue of sections 4.5 and 207. So far there is no dispute. Counsel for the company, however, urged that an agent of a non-resident may be assessed in regular assessment in respect of the income accruing or arising to his principal, but he cannot be called upon to pay advance tax even though he is by virtue of section 160(2) deemed an assessee for the purposes of the Act. Diverse reasons were suggested in support of that argument. It was said that, since u....
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....apply. It is expressly enacted by section 161 that as regards income in respect of which a person is a representative assessee, he shall be subject to the same duties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him beneficially. It is clearly implicit therein that a representative assessee is not exempt from liability to pay advance tax. Of the liability to pay advance tax it is not predicated that the previous year should have come to an end before liability can arise. The previous year of an assessee may in some cases end after the commencement but before the end of a financial year in which advance-tax is payable it may in other cases commence and end with the financial year. ....
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.... in respect of which he may be chargeable to advance tax, if he has not been previously assessed to tax as an agent of a non-resident. That again, in our judgment, is not a ground which exempts an agent from liability to pay advance tax on behalf of his principal. Liability to submit an estimate necessarily implies the duty to secure the requisite information from the non-resident for submitting the estimate. The tax, it must be remembered, is assessed on the agent for and on behalf of the principal, and the Act. has made an express provision enabling the agent to recover from the principal the tax so paid by him. Once the Income-tax Officer treats a person as an agent of a non-resident, liability to pay tax on regular assessment arises; an....
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....n-resident infringe the equality clause of the Constitution has no substance. As already observed, the liability to pay advance tax arises under sections 207 and 208 and its quantum is determined by sections 209, 210 and 212(3), and it is not predicated of the accrual of liability that the total income of the previous year should be ascertained or precisely ascertainable when demand is made by the Income-tax Officer under section 210, or when the assessee is required to make an estimate. The assumption that an assessee whose year of account coincides with the financial year is not in respect of that year liable to pay advance tax is not warranted. The computation of advance tax is not dependent upon the completion of the previous year : it ....