TaxTMI 
TaxTMI 
2025 (3) TMI 2107
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.... M/s. Willow TV International Ltd. This is for the precise reason that the learned assessing authority had set into motion section 148 proceedings vide it's notice dated 30th June, 2021 followed by its order under section 148A(d) dated 20th of July, 2022 and section 148 notice dated 28th July, 2022 (pages 210 to 211) in the paper-book in light of Union of India Vs. Ashish Agarwal, (2022) 444 ITR 1 (SC), respectively. 4. We make it clear at the cost of repetition that since the assessee/appellant herein has been treated as "representative assessee", the learned departmental authorities had issued section 163 notice dated 16th March, 2021 and passed the corresponding order under sub-section (2) thereof on 29th May, 2023 (pages 214 to 217) in the paper-book. 5. The Revenue vehemently argues in this backdrop that the learned departmental authorities had very well issued section 163 notice to the assessee on 16.03.2021 followed by section 148 notice setting into motion the reopening in question. And the issue of the assessee being treated as the representative assessee stood decided on 29th May, 2023 (supra). The Revenue accordingly clarifies that section 163 proceedings against t....
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....nd of the relevant assessment year." It is clear, therefore, that before making the reassessment a notice under section 148 is necessary. Under sub-section (3) of section 149 if such notice is to be served on a person treated as the agent of a nonresident under section 163, the notice is to be issued before the expiry of a period of two years from the end of the relevant assessment year. The short question is, whether the determination, which is contemplated under section 163 after necessary opportunity being given to the assessee, is required to be made before the issue of such notice It would appear that as far as the Indian Income-tax Act, 1922, was concerned, this court appears to have, rejected a similar contention in Blue Star Engineering Co. Bombay (P.) Ltd. v. CIT [1969] 73 ITR 283 (see observations at p. 296). Indeed, the point had been clearly negatived by the decision of the Privy Council in CIT v. Nawal Kishore Kharaiti Lal [1938] 6 ITR 61. It had been expressly held therein that under the Indian Income-tax Act, 1922, it was not necessary for the validity of a notice calling for a return of income under section 23(2), where it is served upon a person a....
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....to a notice to be issued under section 148 of the 1961 Act to a person as an agent of a non-resident. That notice can only be issued after passing an order that the assessee is the agent of the non-resident and is to be treated as such. This decision has, of course, to be made after complying with the provisions of sub-section (2) of section 163 of the 1961 Act. Without deciding this matter, no notice under section 148 read with section 149(3) of the 1961 Act can be issued." This decision of the Punjab and Haryana High Court came to be considered by the Madras High Court in CIT v. Express Newspapers (P.) Ltd. [1978] 111 ITR 347. This aspect of the matter, however, did not specifically arise before the said High Court, and the Madras High Court has expressly stated that they were not called upon to hold whether an order of assessment which was made without serving a recognition order on the representative-assessee was void and unenforceable or (to decide) the specific question which directly arose before the Punjab and Haryana High Court. We were also referred at the Bar to a decision of the Calcutta High Court in CIT v. T.I. & M. Sales Ltd. [1978] 114 ITR 59. On the aspect....
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....onger applicable to the Income-tax Act, 1961, by reason of the specific statutory changes, which the Division Bench of the said court has noted in extenso. If the right of appeal of the assessee is to have any real meaning, then the decision under section 163 must be given previous to the notice under section 148 being issued to an assessee on the basis that the alleged income which had escaped assessment is the income on which the assessee is liable as a representative assessee being the agent of a nonresident covered by section 163. We are also in agreement with the approach indicated by one of the judges of the said High Court in the passage which we have fully extracted. As the passage indicates, the matter is not free from doubt, and, indeed, there was initially a difference of opinion between the two judges, but then it would appear that if two views are possible, the view which ultimately found favour with the majority will be required to be upheld inasmuch as it is the view in favour of the assessee. If the period of limitation of two years prescribed under section 149(3) creates a difficulty for the working out of these provisions, it is for the revenue to seek an amendmen....