Law:

Section:

Section 161 read with sections 166 and 174 of the Income-tax Act, 1961 - Representative assessee - Liability of - Assessment years 1968-69 and 1969-70 - Whether section 166 does not indicate that law confers a discretion or option upon ITO to choose, either initially or subsequent to initiation of proceedings, as to whether he wants to assess and recover tax from non-resident or its agent - Held, yes - Whether even if proceedings of assessment had been commenced as against non-resident principal, still they can be continued as against agent of non-resident principal or, simultaneously, action for assessment and recovery of tax can be taken both against non-resident principal as well as its agent - Held, yes - Whether any omission or failure on part of ITO to take immediate proceedings under section 174 would absolve on agent of non-resident of its liability to be assessed to tax - Held, no II Section 174 read with section 161 of the Income-tax Act, 1961 - Assessment of person leaving India - Assessment years 1968-69 and 1969-70 - Whether any omission or failure on part of ITO to take immediate proceedings under section 174 would absolve agent of non-resident of its liability to be assessed to tax - Held, no Words and phrases : 'Either' and 'or' used in section 166 of the Income-tax Act, 1961 FACTS The petitioner-company entered into an agreement with 'CT' of the United Kingdom to rectify certain defects in the plant and machinery supplied to the petitioner by M of the United Kingdom, and also to supply designs, drawings and other technical know-how, connected with the manufacture of Barium salts. Pursuant to the abovesaid agreement, the non-resident firm supplied necessary designs and drawings, etc. and also sent one of its partners, D for supervising the erection of the plant and machinery. D was in India for about three months. The ITO, felt that some income, profits and gains assessable had accrued or arisen to the non-resident firm and, therefore, it was liable to be assessed under the Act. The ITO passed order treating the petitioner Indian company, as agent of non-resident firm. During the pendency of the said proceedings, the petitioner brought to the…

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