Law:

Section:

Section 2(35) of the Income-tax Act, 1961 - Principal Officer - Assessment years 1965-66 to 1967-68 - Petitioner no. 1 was non-resident company having no place of business or establishment in India - Petitioner No. 2 was director of petitioner No. 1 company and was looking after litigation and pending work of said company in India and there was no other authority in India to deal with affairs of said company - ITO sent notice under section 148 to petitioner No. 2 treating him as principal officer of petitioner No. 1 - Whether for treating a person as principal officer of company it is not necessary that person concerned should be actually managing or administering company but what is necessary is connection with management or administration of company and intention of ITO based on some materials - Held, yes - Whether if on prima facie materials which have rational connection with that finding, ITO indicates intention to person concerned treating him as principal officer, requirements of law are fulfilled - Held, yes - Whether in facts and circumstances of instant case, it was manifest that petitioner No. 2 was being treated as principal officer and notice was served upon him in that capacity and, therefore, said notice was valid - Held, yes FACTS The petitioner No. 1 was a foreign non-resident company. It had its registered office at Singapore. According to the petitioners the petitioner No. 1 did not have any place of business or establishment or connection with India. Up to 1955, the petitioner No. 1 held all the shares of Messrs. TMC Ltd. and since 1956 the petitioner No. 1 had been holding 51 per cent shares in the said company. One 'B', petitioner No. 2, was appointed a director of the petitioner No. 1 for the purpose of looking after certain pending litigations according to the petitioners. On the 6-12-1974, the petitioner No. 2 for and on behalf of the petitioner No. 1 was written to by the ITO, in which it was stated that it appeared that the income had escaped assessment in terms of clause (a) of section 147 of the Income-tax Act in respect of income of the petitioner No. 1 and the petitioner No. 2 was asked to show cause why the assessments for the…

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