Law:

Section:

Section 163, read with section 201, of the Income-tax Act, 1961 - Non-resident - Agent of - Assessment year 1962-63 - Petitioner foreign company which carried on business of exporting jute goods from India had non-resident agents in various foreign countries to whom it paid certain sum of money and ITO treating it as agent of those non-resident agents under section 163 issued notice seeking to recover tax under section 201 in respect of said remittance - Whether action of ITO in treating petitioner as agent under section 163 for purpose of action under section 201 is plainly not permissible in law and court was entitled to restrain authorities from continuing proceedings on basis of such a notice - Held, yes - Whether it would be open to income-tax authorities, if and when they make up their minds to elect as to whether petitioner should be proceeded against either under group of sections from 160 to 163 or later groups sections from 195 to 201 which are mutually exclusive - Held, yes - Whether therefore, impugned notice was recalled and cancelled and the revenue was prohibited from taking any steps or proceeding on basis of that notice - Held, yes FACTS The petitioner was a limited company incorporated under the laws of the United Kingdom and carried on business, inter alia, of exporting jute goods from India. According to the petitioner, it had agents in various countries for the sale of its export goods. The said foreign agents were non-residents within the meaning of the Act. The petitioner paid to its non-resident agents commission in respect of the sales made by them. Some of the non-resident agents acted as agents-cum-buyers with he full knowledge and consent of the petitioner and some acted as agents only. According to the petitioner, none of the said non-resident agents performed any activity or rendered any services in India and their entire activities were in their own countries. For the previous year relating to the assessment year 1962-63, a sum of £74,793-5-3 became due and payable by the petitioner to its non-resident agents. The said sum of £74,793-5-3 was duly remitted by the petitioner to the non-resident agents, after obtaining the previous…

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