Even if ‘Representative Assessee’, no liability for unconnected income – Delhi HC

General Electric Company Vs Deputy Director Of Income Tax (Delhi High Court)- Section 163 really provides only the machinery for giving effect to Sections 160 and 161, and the mere appointment of an agent under Section 163 would be of no consequence unless there is income in respect of which the agent can be held to be a representative- assessee under Section 160 and can be assessed as such under Section 161 of the Act. In other words, any person appointed an agent under Section 163 is not necessarily asses-sable as a representative assessee in respect of the non-resident’s income; it is only in relation to the income covered by Section 160 that the status of representative assessee emerges and the liability to be assessed under Section 161 arises. For instance, though there may be a business connection between a resident and non-resident company, where there is no evidence to show that any profits accrued to the non-resident company through the business connection, no assessment can be made on the resident company as the agent of the non-resident company and the mere appointment of the resident company as such agent under this section would be of no avail.

General Electric Company & Anr.

Vs

Deputy Director Of Income Tax

Delhi High Court

W.P. (C) 9100 of 2007

Reserved on: 12^th July, 2011

Pronounced on: 12^th August,2011