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Section 248 read with section 195 of the Income-tax Act, 1961 [Corresponding to section 30(1A) read with section 18(3B) of the Indian Income-tax Act, 1922] - Appeal by person denying liability to deduct tax - Appellant remitted certain amount as selling commission to firm in Indonesia - ITO rejecting appellant's contention that firm was not non-resident, directed appellant under section 18(3B) of 1922 Act to pay tax on amount remitted - Appeal by appellant was dismissed on ground that it had not complied with conditions specified in section 30(1A) of 1922 Act - Whether ITO was sole judge of fact whether firm in question was resident or non-resident - Held no - Whether provisions of section 30(1A) could not apply to instant case as appellant contended that firm to whom it made payment was not non-resident firm - Held, yes - Case remanded back FACTS The ITO, directed the appellant under section 18(3B) read with section 18(7) of the 1922 Act to pay tax on a sum of Rs. 2,00,000 remitted by it as selling commission to a firm in Indonesia. The ITO rejected the contention of the appellant that the firm was not a non-resident firm. On appeal, the AAC took the view that an appeal lay only under section 30(1A). But, before such an appeal can be entertained the appellant must satisfy two conditions, namely, (1) he had deducted the tax due from the non-resident in accordance with the provisions of sub-section (3B); and (2) that he had paid the sum deducted to the Government. The appellant having not complied with those two conditions, the AAC held that the appeal was incompetent. The order of the AAC was confirmed by the Tribunal. On writ, the Single Judge held that the firm was not a non-resident firm and that being so the appellant was not required to act under section 18(3B) of the 1922 Act. He accordingly set aside the impugned order. The division Bench allowed the revenue's appeal holding that the ITO had jurisdiction to decide the residential status of the firm. On appeal to the Supreme Court. HELD The Appellate Bench appeared to have been under the impression that the ITO was the sole judge of the fact whether the firm in question was resident or non-resident. This…

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