TaxTMI 
TaxTMI 
2007 (7) TMI 293
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....evity "the Tribunal") under section 256(1) of the Act. The Revenue has claimed that three questions would emerge from the order dated December 9, 1997, passed in ITA No. 97/Asr/1985 in respect of the assessment year 1973-74 which are as under : "(i) Whether, on the facts and in the circumstances of the case, the learned Tribunal was right in law in cancelling the assessment made by the Assessing Officer and confirmed by the learned first appellate authority on the agent of the non-resident assessee who himself admitted to be an agent by signing the return of income ? (ii) Whether, on the facts and in the circumstances of the case, the learned Tribunal was right in law in holding that the Assessing Officer was required to pass an order....
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.... assessment order after giving due opportunity to Sudershan Kumar of being heard. 3. The Income-tax Officer issued notice under section 143(2) but the asses-see did not reply to the notice. Consequently, the Income-tax Officer proceeded to frame the best judgment assessment under section 144 of the Act which was completed at a net income of Rs. 67,420 vide his order dated March 30, 1981. However, no findings on the status of non-resident Indian or his agent brother Sudershan Kumar were recorded. The assessment order was reopened under section 146 of the Act on July 23, 1981. Again, a notice under section 143(2) was issued and again the assessee failed to turn up despite service. The Income-tax Officer framed the assessment ex parte and a....
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....mber 10, 1982, which had not been complied with by the Income-tax Officer. He further distinguished the decision of the Bombay High Court in the case of Harakchand Makanji and Co. v. CIT [1948] 16 ITR 119 and concluded that it was not applicable to the case as that was rendered under the old Act of 1922 in which there was no provision for filing an appeal against the order of appointment of agent of non-resident. The learned Accountant Member held that the issue was fully covered in favour of the assessee as per the decision of the jurisdictional High Court in the case of CIT v. Kanhaya Lal Gurmukh Singh [1973] 87 ITR 476 (P & H) which has been followed by the Madras High Court in the case of CIT v. Express Newspapers P. Ltd. [1978] 111 ITR....
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....e same reads as under : "163. (2) No person shall be treated as the agent of a non-resident unless he has had an opportunity of being heard by the Assessing Officer as to his liability to be treated as such." 8. These provisions are mandatory in character because in section 163(2) the expression "shall" has been used and, therefore, an order was required to be passed by the Income-tax Officer declaring Shri Sudershan Kumar as an agent of his assessee brother Prem Kumar Bhagat. The fact that he had signed and filed the return holding himself out as an agent of his non-resident Indian brother could not adversely affect his legal obligation because on two occasions on August 25, 1978, and again on November 10, 1982, the Appellate Assista....