Shah, J. - (1.) On February 25, 1965, the Income-tax Officer, Companies Circle I (3), Bombay, directed that for the purpose of the Income Tax Act, 1961, the Premier Automobiles Ltd.-hereinafter called 'the Company'-be treated as an agent of M/s Dodge Brothers of United Kingdom-a non-resident Company. On the same day the Income-tax Officer issued a notice of demand under Sec. 156 read with Sec. 210 of the Act calling upon the Company to pay on or before March, 1965, advance-tax of Rs. 11,51,235.91 as agent of the foreign principal during the financial year 1964-65. The Company then moved a petition in this Court for an order quashing and setting aside the order under Section 163 and notice of demand under Section 156 for the assessment year 1965-66 and for an injunction or prohibition restraining the Income-tax Officer from enforcing or implementing the order under Section 163 and the notice under Section 156 read with Section 210 of the Income Tax Act, 1961. The petition was resisted by the Income-tax Officer.
(2.) In support of the petition counsel for the Company raised two contentions: (1) that under Sections 209 and 210 of the Income Tax Act 1961, no order for payment of advance-tax can be made against an agent of a non-resident; and (2) that a provision which authorises collection for advance-tax from an agent of a non-resident infringes the equality clause of the Constitution and is on that account void. Sections 207 and 208 of the Income Tax Act, 1961, insofar as they are material, provide: 207-" (1) Tax shall be payable in advance in accordance with the provisions of Sections 208 to 219 in case of income other than income chargeable under the head 'Capital gains.'" 208-"Advance tax shall be payable in the financial year:- (a) where the total income exclusive of capital gains of the assessee referred to sub-clause (i) of Clause (a) of Section 209 exceeded the maximum amount not chargeable to income-tax in his case by two thousand five hundred rupees; or (b) ********** " Section 209 sets out the rules for computation of amount of advance-tax payable by an assessee in the financial year. Section 210 provides by sub-section (1)- "Where a person has been previously assessed by way of regular assessment under this Act or under the Income Tax Act, 1922, the income-tax Officer may, on or after the 1st day of April in financial year by order in writing, require him to pay to the credit of the Central Government advance tax determined in accordance with the provisions of Sections 207, 208, 209." Sections 207, 208, 209 and 210 prescribe machinery for imposition of liability for and determination of the quantum of advance-tax in respect of income which is chargeable to income-tax in the hands of a person on regular assessment.
(3.) Under the Income-tax Act 1961 a person is liable to be assessed to tax in respect of his own income, and also in respect for certain classes of income received by or accruing or arising to others. He is also liable to be assessed to tax as a representative assessee. That is expressly so enacted by Section 161 (1) which provides: "Every representative assessee, as regards the income in respect for which he is a representative assessee, shall be subject to the same duties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him beneficially, and shall be liable to assessment in his own name in respect of that income; but any such assessment shall be deemed to be made upon him in his representative capacity only, x x." A representative assessee by sub-sec. (1) of Section 160 includes amongst others, the agent of a non-resident in respect of the income of a non-resident specified in Section 9 (1) (i), and also a person who is treated as an agent under Section 163. By sub-section (2) a representative assessee is deemed to be an assessee for the purpose of the Act. By Section 162 the representative assessee, who as such pays any sum under the Act, may recover the sum so paid from the person on whose behalf it is paid. Section 163 (1) defines for the purposes of the Act an "agent" in relation to a non-resident. Resort to the machinery for assessing a representative assessee is however not obligatory:it is open to the Income-tax Officer to make a "direct assessment of the person on whose behalf or for whose benefit income therein referred to is receivable" or to recover "from such person the tax payable in respect of such income".;