Law:

Section:

Section 163, read with section 9 of the Income-tax Act, 1961 [Corresponding to section 43, read with section 42 of the Indian Income-tax Act, 1922] - Non-resident - Agent of - Assessment years 1942-43 to 1945-46 - Whether if there is a business connection in year of account, a statutory agent can be appointed under section 43 of 1922 Act notwithstanding fact that at date of appointment of statutory agent non-resident was not alive - Held, yes - Whether in order that agency which constitutes a connection between a non-resident and assessee should be a business connection as contemplated by section 42 of 1922 Act there must be an element of continuity in agency - Held, yes - Whether an isolated transaction through an agent or even a connection for a short period would not constitute business connection - Held, yes - Whether mere fact that non-resident had more than one agent was not sufficient to lead to conclusion that assessee, who was appointed as an agent, was not necessarily a person who could be appointed a statutory agent under section 43 of 1922 Act - Held, yes FACTS The assessee was appointed a statutory agent under section 43 for the year 1942-43 on 12-3-1945. The non-resident died on the 26-3-1946, and the orders appointing the assessee statutory agent with regard to assessment years 1943-44, 1944-45 and 1945-46 were passed on the 27-6-1946. The assessee contended that inasmuch as the non-resident was dead, no order could be passed after his death, appointing the assessee as statutory agent. The ITO who made an order under section 43 found that the assessee had been regularly purchasing and selling goods on behalf of the non-resident and under his instructions. The assessee also transacted ready and forward business in cotton piece goods and other articles on behalf of the non-resident and under his instructions. On appeal the Tribunal held that the assessee was not the sole selling agent of the non-resident. It had also been found by the Tribunal that the assessee acted as a commission agent of the non-resident for several years and that the assessee entered into several transactions on behalf of the non-resident. On reference : HELD If there was a…

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