19. We have given careful thought to the rival submissions of the parties and examined them in the light of material available on record, statutory provisions and case law cited at the Bar. At the very outset, we may state that the basic contention of the assessee that he is and should be considered as an agent under clauses (a), (b) & (c) u/s 163(1) of the Act, is misplaced. Provisions of sections 160 to 166 of the Income-tax Act, 1961 as also corresponding provisions of 1922 Act, are/were enabling provisions which empower the Income-tax authorities, give them an option, to make assessment of the non-resident, if they are able to get at him within India or make assessment on agent of such non-resident. The option is with the Income-tax authorities and not with the non-resident or his agent to claim that he be assessed under a particular clause of section 163 and not under 160(1)(i) read with section 161 of the Income-tax Ac. On above premises, we proceed to examine the referred question.
23. Aforesaid decision of three Judges was not cited before the Bench in the case of Hazoora Singh (supra) and in several other cases on the subject, which lead to a different decision in those cases. However, as noted above, in the case of Kanhaya Lal Gurmukh Singh (supra), the word “treated” was held to be “adjudication” of liability of such person (agent) to be treated as such. This inference also follow from the plain language of section 163(2) providing opportunity of being heard by the Assessing Officer to the agent as to his liability to be treated as such. Thus `treatment’ is calling upon a person to discharge the liabilities of an agent of non-resident after hearing him of his liability as such. In other words liabilities of a representative assessee of the non-resident can be fastened on such person in accordance with provisions of the Act after hearing him. It is, therefore, clear that an assessment on the person who voluntarily files return as agent of the non-resident, is not treatment of the person “as agent of the non-resident u/s 163”. Treatment, as already held, is adjudication of liability and occasion to make such adjudication will not arise unless question is raised by the concerned person. So a person who admits his status of agent of non- resident is not a person “treated” as agent of the non-resident. Treatment of a person as agent of the non-resident is quite different from assessment or re-assessment of non-resident through such a person. This would also be in line with provision of Section 149(3) as interpreted by Punjab & Haryana High Court and various other courts. The treatment has to be prior to service of notice on the person who is desired to be assessed. Service of notice u/s 148 is first step in the assessment and not assessment. Therefore, assessment of person as agent of non-resident is not “treatment” as envisaged under section 163(2). It is adjudication which must precede assessment.
27. Having regard to above terms, it cannot be disputed that assessee is agent of the non-resident. The assessee never disputed its liability to be assessed as agent of the non-resident. Not only income tax returns were signed and filed as agent for and on behalf of the non-resident, but several other documents were furnished with the income tax authorities including an undertaking that taxes due from the non-resident would be paid by the assessee agent. Having regard to above clear and undisputed facts, it was not necessary for authorities in this case to provide any opportunity of being heard to the assessee as regards his liability to be treated as an agent under the Act. In fact, it would have looked absurd to provide such an opportunity of being heard to a person who has accepted and never disputed his liability to be assessed as an agent. Therefore, there was no occasion to pass any order u/s 163(2) of the I.T. Act. In other words, there was no question of “treating the assessee as an agent of the non-resident” and, therefore, provision of Section 149(3) had no application in this case. As noted earlier with reference to provisions of old Act and Section 163(2) of the Act, these provisions are for the benefit of the agent relating to his liabilities under the Act. The benefit of provision (opportunity of being heard) can be waived by the agent as authoritatively held by their Lordships of Bombay High Court. Having regard to the act and conduct of the assessee noted above in detail, it is difficult to dispute that the assessee did not waive this benefit or privilege under the statutory provision. Therefore, the assessee agent can not turn around and raise an objection of failure to provide an opportunity of being heard u/s 163(2). The assessee was not and could not be treated as an agent u/s 163 of the Act. Besides, the circumstances under which original returns in all the assessment years under reference were filed u/s 139, accepting position of “agent of non-resident” remained unaltered. These unaltered circumstances are to be considered at the time of application of Section 147/148 of the Act for assessment of non-resident through the agent. As pointed out by their Lordships of Bombay High Court, assessment includes reassessment. It is not possible to contend that he is an agent for filing returns u/s 139(1) and for regular assessment but not for reassessment. Therefore, on the facts and circumstances of the case, provision of Section 149(3) has no application in this case nor was there any necessity to pass any order in terms of Section 163(2) of the Act in this case.