M.M.Dutt, J. - (1.) This appeal is at the instance of the revenue and it is directed against the judgment of Sabyasachi Mukharji J. whereby the rule nisi obtained by the respondent No. 1 on its application under Article 226 of the Constitution was made absolute.
(2.) One Mr. J. H. Somerville was the managing director of the respondent No. 1, Eastern Scales (Pvt.) Ltd. He retired on April 30, 1968, and left this country for Australia. Since his retirement, he has been getting pensions from the respondent No. 1 company and also from two other companies, namely. Automatic Machines Co. (India) Pvt. Ltd. and Bell Punch (India) P. Ltd., who are respectively the respondents Nos. 2 and 3. The ITO assessed the respondent No. 1, Eastern Scales (Pvt.) Ltd., treating him as the agent of the said Mr. Somerville, admittedly a non-resident, in respect of the incomes from the said three companies including that from the respondent No. 1, for the assessment years 1969-70, 1970-71 and 1971-72. The income of the said Mr. Somerville was salary and pension for the assessment year 1969-70 and only pension for the assessment years 1970-71 and 1971-72. The respondent No. 1 preferred three appeals to the AAC, who affirmed the order of the ITO for the assessment year 1969-70 and dismissed the appeal. So far as the appeals relating to the assessment years 1970-71 and 1971-72 were concerned, the AAC held that the liability of the assessee-company for the assessment of the non-resident was limited only to those incomes in respect of which the assessee-company could be treated as a representative assessee, that is to say, only those incomes which the non-resident received through the assessee-company and not his other income. In that view of the matter, he deleted the pensions received by the non-resident from the Automatic Machines Co. (India) Pvt. Ltd. and Bell Punch (India) Pvt. Ltd. from the total income assessed on the assessee as an agent of the non-resident. Against the order of the AAC relating to the assessment year 1969-70, the respondent No! 1 preferred an appeal to the Income-tax Appellate Tribunal, Calcutta Bench. The ITO preferred two appeals to the said Tribunal against the orders of the AAC for the assessment years 1970-71 and 1971-72. The Tribunal allowed the appeal preferred by the respondent No. 1 for the assessment year 1969-70, holding that the income of the said Mr. Somerville from the said two other companies, namely, the respondents Nos. 2 and 3, not having been received by the assessee-company, the same should be deleted from the total income for the purpose of assessment of the assessee-coinpany as the agent of the nonresident. The other two appeals preferred by the ITO relating to the assessment years 1970-71 and 1971-72 were dismissed by the Tribunal and the orders of the AAC were affirmed.
(3.) After the appeals of the respondent No. 1 were allowed by the AAC for the assessment years 1970-71 and 1971-72, the ITO by his order dated April 25, 1973, revised the original assessment orders and deleted the income of the non-resident from the Automatic Machines Co. (India) Pvt. Ltd. and' Bell Punch (India) Pvt. Ltd. in terms of the order of the AAC. The total income that was computed by him after such deletion was Rs. 46,000 for the assessment year 1970-71 and Rs. 36,525 for the assessment year 1971-72. After the disposal of all the appeals by the Tribunal, the ITO by his order dated March 7, 1974, deleted the salary and pension received by the said Mr. Somerville from the said two companies from his total income and computed the same at Rs. 1,48,807 for the assessment year 1969-70. He, however, charged tax on the said amount at the rate applicable to the sum of Rs. 2,30,370 which was originally assessed by him as the total income of the non-resident. So far as the assessment years 1970-71 and 1971-72 were concerned, he by his orders passed on the same day, that is, March 7, 1974, purported to rectify his revised orders dated -April 25, 1973, on the ground of mistake apparent on the face of the record and charged tax at the rate applicable to the total income of Rs. 1,24,000 for the assessment year 1970-71 and Rs. 87,530 for the assessment year 1971-72 as originally assessed.;