A recent ruling of the Mumbai Income Tax Appellate Tribunal (ITAT) in the case of Hindalco Industries Ltd. (Taxpayer) [AIT 2010-211-1TAT] under the provisions of the Indian Tax Act, 1961 (ITA), held that any person from whom a non resident is in receipt of any income can be treated as an agent of such non-resident.
Such an agent is treated as a representative assessee for the purpose of assessment of income of such non-resident under the ITA. The ITAT held that income which has been assessed to tax in the hands of the non-resident recipient cannot be assessed again in the hands of the representative assessee (payer of the income) under the ITA.
Background:- Under the provisions of the ITA, the assessment of the representative assessee is at par with the assessment of the non-resident being represented i.e. tax can be levied and recovered from the representative assessee in the same manner in which tax would be leviable and recoverable from the non-resident being represented. Such representative assessee is entitled to recover the tax paid on behalf of the non-resident being represented. The payer of income to the non-resident can be treated as a representative assessee of the non-resident recipient.
Facts
