Taxability of income in hands of a non-resident not a relevant consideration for treating a resident to be an agent of a non-resident

The provisions of section 163 of the Act do not require that, the liability of the non-resident to pay tax should be established before initiating proceedings under section 163 of the Act on a person to treat it as the agent or representative assessee of the non-resident.  The purpose of section 163 of the Act was to enable revenue authorities to proceed and impose a vicarious liability on a person regarded as agent, in an event when income was found to be taxable in the hands of the non-resident.

The taxability of income in the hands of a non-resident was to be determined in separate assessment proceedings, made directly in the hands of the non­resident (section 166 of the Act) or in the hands of the person treated as agent of the non-resident (section 160 of the Act read with section 163 of the Act)

· If any of the parameters in section 163 (1) (a) to (d) of the Act are satisfied, a person can be regarded as an agent of the non-resident. In this case, the assessee can be treated as an agent of Airline Rotables Ltd., UK ,

– As sufficient nexus existed between the business of