M/s. Bengal Tiger Line Cyprus Limited, CHENNAI V. DDIT, CHENNAI

ITA 2220/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5091 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-05-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 31-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T BANUSEKAR SHRI SHAJI P JACOB
• Keywords: Capital asset; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI (BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A. NOS. 2220, 2221, 2222 & 2223/MDS/2010 ASSESSMENT YEARS : 2002-03, 2005-06, 2006-07 & 200 7-08 M/S BENGAL TIGER LINE LIMITED, CYPRUS REP BY M/S BENGAL TIGER LINE (INDIA) PVT. LTD., NO.6, INDIAN CHAMBER BUILDING, ESPLANADE, CHENNAI 600 108. PAN : AAACB1369A (APPELLANT) V. THE DEPUTY DIRECTOR OF INCOME TAX, INTERNATIONAL TAXATION, CHENNAI 600 034. (RESPONDENT) APPELLANT BY : SHRI T. BANUSEKAR RESPONDENT BY : SHRI SHAJI P. JACOB O R D E R PER BENCH : THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST TH E ORDERS PASSED BY ASSESSING OFFICER FOR THE RESPECTIVE ASSE SSMENT YEARS, IN PURSUANCE OF DIRECTIONS OF THE DISPUTE RESOLUTION P ANEL. 2. ASSESSEE HAS FILED ADDITIONAL GROUNDS FOR ALL TH E YEARS. SUCH ADDITIONAL GROUNDS ARE REPRODUCED HEREUNDER:- FOR A.Y. 2002-03 FOR THAT THE ASSESSING OFFICER AN D THE HON'BLE DISPUTE I.T.A. NOS. 2220 TO 2223/MDS/10 2 RESOLUTION PANEL FAILED TO APPRECIATE THAT THE NOTI CE U/S. 148 WAS BAD IN LAW AS IT WAS BARRED BY LIMITATION. A.Y. 2005-06 (1) FOR THAT THE ASSESSING OFFICER AN D THE HON'BLE DISPUTE RESOLUTION PANEL FAILED TO APPRECIATE THAT THE NOTICE U/S.148 WAS BAD IN LAW AS IT WAS BARRED BY LIMITATION. (2) FOR THAT THE ORDER PASSED BY THE ASSESSING OFFI CER WAS BAD IN LAW, AS THE ASSESSEE WAS NOT SPECIFICALL Y APPOINTED AS A STATUTORY AGENT FOR THE ASSESSMENT YEA R UNDER CONSIDERATION. A.Y. 2006-07 FOR THAT THE ORDER PASSED BY THE ASSESS ING OFFICER WAS BAD IN LAW, AS THE ASSESSEE WAS NOT SPECIFICALLY APPOINTED AS A STATUTORY AGENT FOR THE ASSESSMENT YEA R UNDER CONSIDERATION. A.Y. 2007-08 FOR THAT THE ORDER PASSED BY THE ASSESS ING OFFICER WAS BAD IN LAW, AS THE ASSESSEE WAS NOT SPECIFICALLY APPOINTED AS A STATUTORY AGENT FOR THE ASSESSMENT YEA R UNDER CONSIDERATION. 3. IT MAY BE SEEN FROM THE ABOVE THAT THERE IS A CO MMON ADDITIONAL GROUND FOR ASSESSMENT YEARS 2005-06, 200 6-07 AND 2007- 08 WHICH IS THAT THE ASSESSEE WAS NOT SPECIFICALLY APPOINTED AS A STATUTORY AGENT FOR THESE ASSESSMENT YEARS. FOR AS SESSMENT YEARS 2002-03 AND 2005-06, THE ADDITIONAL GROUND IS THAT THE ASSESSMENTS WERE BAD IN LAW SINCE IT WAS DONE PURSUANT TO A NOT ICE ISSUED UNDER SECTION 148 OF INCOME-TAX ACT, 1961 (HEREINAFTER CA LLED THE ACT) WHICH WAS TIME BARRED. 4. BOTH THE ISSUES RAISED IN THE ADDITIONAL GROUNDS , AS PER THE LEARNED COUNSEL FOR THE ASSESSEE, ARE PURELY QUESTI ONS OF LAW AND I.T.A. NOS. 2220 TO 2223/MDS/10 3 BASED ON MATERIALS AVAILABLE ON RECORD. LEARNED D. R. DID NOT SERIOUSLY OBJECT TO THE ADMISSION OF THE ADDITIONAL GROUNDS. WE ARE ADMITTING THE ADDITIONAL GROUNDS RAISED BY THE ASSE SSEE PRIMARILY FOR THE REASON THAT THESE APPEALS ARE AGAINST THE ORDER S OF THE ASSESSMENTS PASSED PURSUANT TO DIRECTIONS OF DISPUT E RESOLUTION PANEL AND SECONDLY, WE FIND THAT THE GROUNDS ARE PU RE QUESTIONS OF LAW, THE UNDERLYING FACTS BEING ALREADY ON RECORD. 5. FIRST WE WILL DEAL WITH THE GROUND REGARDING THE ASSESSMENTS BEING BAD IN LAW, THE NOTICE ISSUED UNDER SECTION 1 48 OF THE ACT BEING TIME BARRED. LEARNED COUNSEL FOR THE ASSESSE E INVITED OUR ATTENTION TO SUB-SECTION (3) OF SECTION 149 OF THE ACT. ACCORDING TO HIM, HERE THE ASSESSEE WAS TREATED AS AN AGENT OF M /S BENGAL TIGER LINE LIMITED, CYPRUS, WHICH WAS ENGAGED IN THE OPER ATION OF SHIPS IN INTERNATIONAL TRAFFIC AND IT EARNED FREIGHT INCOME FROM SUCH OPERATIONS. AS PER THE LEARNED COUNSEL, A PART OF SUCH FREIGHT WAS RECEIVED IN INDIA AND M/S BENGAL TIGER LINE (INDIA) PVT. LTD. W AS AN AGENT OF M/S BENGAL TIGER LINE LIMITED, CYPRUS, IN INDIA. LEARN ED COUNSEL SUBMITTED THAT WHEN A NOTICE UNDER SECTION 148 OF T HE ACT IS TO BE SERVED ON A PERSON TREATED AS THE AGENT OF A NON-RE SIDENT UNDER SECTION 163 OF THE ACT, SUCH NOTICE HAS TO BE ISSUE D BEFORE EXPIRY OF TWO YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. PLACING BEFORE I.T.A. NOS. 2220 TO 2223/MDS/10 4 US COPIES OF THE NOTICES ISSUED FOR ASSESSMENT YEAR S 2002-03 AND 2005-06, LEARNED COUNSEL POINTED OUT THAT FOR THE F ORMER ASSESSMENT YEAR, THE NOTICE WAS DATED 31.3.2009, WHEREAS FOR T HE LATTER ASSESSMENT YEAR IT WAS DATED 19.1.2009. ACCORDING TO HIM, BOTH THE NOTICES WERE ISSUED AFTER THE END OF TWO YEARS FROM THE RELEVANT ASSESSMENT YEARS AND THEREFORE, BY VIRTUE OF SUB-SE CTION (3) OF SECTION 149 OF THE ACT, THE ASSESSMENTS WERE INVALI D IN THE EYES OF LAW. 6. VIS--VIS THE ISSUE REGARDING ASSESSEE HAVING NO T BEEN APPOINTED AS STATUTORY AGENT FOR ASSESSMENT YEARS 2 005-06, 2006-07 AND 2007-08, LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ASSESSEE WAS APPOINTED AS STATUTORY AGENT ONLY FOR ASSESSMENT YEAR 2002-03 AND THERE WAS NO SUCH APPOINTMENT FOR THE O THER ASSESSMENT YEARS. RELYING ON THE DECISION OF HON'B LE APEX COURT IN THE CASE OF H.L. SUD, ITO V. TATA ENGINEERING & LOC OMOTIVE CO. LTD. (1969) 71 ITR 457 (SC), LEARNED COUNSEL ARGUED THAT NOTICE FOR APPOINTMENT AS AN AGENT HAD TO BE GIVEN BY AN ITO F OR EACH OF THE ASSESSMENT YEARS AND UNLESS THERE WAS A FRESH APPOI NTMENT AS AGENT, NO LIABILITY COULD BE FASTENED ON THE ASSESS EE. I.T.A. NOS. 2220 TO 2223/MDS/10 5 7. PER CONTRA, THE LEARNED D.R. FAIRLY SUBMITTED TH AT THERE WAS NO FRESH APPOINTMENT DONE IN YEARS AFTER ASSESSMENT YE AR 2002-03. NEVERTHELESS, ACCORDING TO HIM, SUCH TECHNICAL ISSU ES WOULD NOT MAKE THE ASSESSMENTS INVALID. 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. IN RESOLVING THE ISSUE AS TO WHETHER NOTICE UNDER S ECTION 148 WAS BARRED BY LIMITATION, IT IS NECESSARY TO PRODUCE RE LEVANT SUB-SECTION (3) OF SECTION 149 AS UNDER:- 149 (3) IF THE PERSON ON WHOM A NOTICE UNDER SECTIO N 148 IS TO BE SERVED IS A PERSON TREATED AS THE AGENT OF A NON- RESIDENT UNDER SECTION 163 AND THE ASSESSMENT, REASSESSMENT OR RECOMPUTATION TO BE MADE IN PURSUAN CE OF THE NOTICE IS TO BE MADE ON HIM AS THE AGENT OF SUC H NON- RESIDENT, THE NOTICE SHALL NOT BE ISSUED AFTER THE EXPIRY OF A PERIOD OF TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. 9. THERE IS NO DISPUTE HERE THAT M/S BENGAL TIGER L INE (INDIA) PVT. LTD. WAS TREATED BY THE ASSESSING OFFICER AS THE AG ENT OF M/S BENGAL TIGER LINE LIMITED, CYPRUS. NOTICES DATED 31.3.200 9 FOR ASSESSMENT YEAR 2002-03 AND 19.1.2009 FOR ASSESSMENT YEAR 2005 -06, WERE ADDRESSED TO M/S BENGAL TIGER LINE LIMITED, CYPRUS REPRESENTED BY M/S BENGAL TIGER LINE (INDIA) PVT. LTD. THERE IS A LSO NO DISPUTE THAT THE ASSESSMENTS MADE IN PURSUANCE OF SUCH NOTICES O N M/S BENGAL TIGER LINE (INDIA) PVT. LTD. WAS IN ITS CAPACITY AS THE AGENT OF SUCH I.T.A. NOS. 2220 TO 2223/MDS/10 6 NON-RESIDENT. THERE IS ALSO NO DISPUTE THAT M/S BE NGAL TIGER LINE LIMITED, CYPRUS WAS A NON-RESIDENT COMPANY. THEREF ORE, SUB-SECTION (3) OF SECTION 149 OF THE ACT IS SQUARELY APPLICABL E. THE NOTICES DATED 31.3.2009 FOR ASSESSMENT YEAR 2002-03 AND 19. 1.2009 FOR ASSESSMENT YEAR 2005-06 ARE BOTH BEYOND THE TWO YEA RS TIME PERIOD FROM THE END OF THE RESPECTIVE ASSESSMENT YEARS. T HUS, THE TIME LIMIT SPECIFIED IN SUB-SECTION (3) OF SECTION 149 OF THE ACT HAVE BEEN BREACHED FOR BOTH THESE YEARS. WE HAVE NO HESITATI ON TO HOLD THAT SUCH NOTICES WERE BAD IN LAW AND WE QUASH SUCH NOTI CES AS WELL AS ASSESSMENTS MADE IN PURSUANCE OF SUCH NOTICES. 10. COMING TO THE OTHER ADDITIONAL GROUND TAKEN BY THE ASSESSEE WHICH IS REGARDING NON-APPOINTMENT OF ASSESSEE AS S TATUTORY AGENT FOR ASSESSMENT YEARS 2005-06, 2006-07 AND 2007-08, RELIANCE HAS BEEN PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF TATA ENGINEERI NG & LOCOMOTIVE CO. LTD. (SUPRA). IT IS AN ADMITTED POSITION THAT THE ASSESSEE WAS APPOINTED AS A STATUTORY AGENT OF M/S BENGAL TIGER LINE LIMITED, CYPRUS ONLY FOR ASSESSMENT YEAR 2002-03 AND NOT FOR THESE ASSESSMENT YEARS. THE QUESTION BEFORE HON'BLE APEX COURT IN THE CASE OF TATA ENGINEERING & LOCOMOTIVE CO. LTD. (SUP RA) WAS WHETHER NOTICE UNDER SECTION 43 OF INCOME-TAX ACT, 1922 HAD TO BE GIVEN BY I.T.A. NOS. 2220 TO 2223/MDS/10 7 ITO FOR EACH ASSESSMENT YEAR TO APPOINT A PERSON AS AN AGENT. SECTION 43 OF INCOME-TAX ACT, 1922 STOOD AS UNDER:- 43. ANY PERSON EMPLOYED BY OR ON BEHALF OF A PERSON RE SIDING OUT OF THE TAXABLE TERRITORIES, OR HAVING ANY BUSINE SS CONNECTION WITH SUCH PERSON, OR THROUGH WHOM SUCH PERSON IS IN THE RECEIPT OF ANY INCOME, PROFITS OR GAINS UPON WHOM THE ITO HA S CAUSED A NOTICE TO BE SERVED OF HIS INTENTION OF TREATING HI M AS A THE AGENT OF THE NON-RESIDENT PERSON SHALL, FOR ALL THE PURPO SES OF THIS ACT, BE DEEMED TO BE SUCH AGENT: PROVIDED THAT WHERE TRANSACTIONS ARE CARRIED ON IN THE ORDINARY COURSE OF BUSINESS THROUGH A BROKER IN THE TAXABLE TERRITORIES IN SUCH CIRCUMSTANCES THAT THE BROKER DOES NOT IN RESP ECT OF SUCH TRANSACTIONS DEAL DIRECTLY WITH OR ON BEHALF OF A NO N-RESIDENT PRINCIPAL BUT DEALS WITH OR THROUGH A NON-RESIDENT BROKER WHO IS CARRYING ON SUCH TRANSACTIONS IN THE ORDINARY COURSE OF HIS BUSINESS AND NOT AS A PRINCIPAL, SUCH FIRST MENTION ED BROKER SHALL NOT BE DEEMED TO BE AN AGENT UNDER THIS SECTION IN RESPECT OF SUCH TRANSACTIONS : PROVIDED FURTHER THAT NO PERSON SHALL BE DEEMED TO BE THE AGENT OF A NON-RESIDENT PERSON, UNLESS HE HAS HAD AN OPPO RTUNITY OF BEING HEARD BY THE ITO AS TO HIS LIABILITY. EXPLANATION : A PERSON, WHETHER RESIDING IN OR OUT OF THE TAXABLE TERRITORIES, WHO ACQUIRES, AFTER THE 28 TH DAY OF FEBRUARY, 1947, WHETHER BY SALE, EXCHANGE OR TRANSFER, A CAPITAL ASS ET IN THE TAXABLE TERRITORIES FROM A PERSON RESIDING OUT OF T HE TAXABLE TERRITORIES SHALL, FOR THE PURPOSES OF CHARGING TO TAX THE CAPITAL GAIN ARISING FROM SUCH SALE, EXCHANGE OR TRANSFER, BE DEEMED TO HAVE A BUSINESS CONNECTION, WITHIN THE MEANING OF T HIS SECTION, WITH SUCH PERSON RESIDING OUT OF THE TAXABLE TERRIT ORIES. 11. AGAINST THE ABOVE PROVISION WHICH WAS THERE IN THE 1922 ACT, THE RELEVANT PROVISIONS IN INCOME-TAX ACT, 1961 ARE SECTIONS 160 AND 163. CLAUSE (I) OF SUB-SECTION (1) OF SECTION 160 SAYS THAT A I.T.A. NOS. 2220 TO 2223/MDS/10 8 REPRESENTATIVE-ASSESSEE, IN RESPECT OF THE INCOME O F A NON-RESIDENT, MEANS THE AGENT OF A NON-RESIDENT, INCLUDING A PERS ON WHO IS TREATED AS AN AGENT UNDER SECTION 163 OF THE ACT. SECTION 163 OF THE ACT, WHICH SPECIFIES WHO CAN BE REGARDED AS AN AGENT, IS REPRODUCED HEREUNDER:- 163. (1) FOR THE PURPOSES OF THIS ACT, AGENT, IN RELATION TO A NON-RESIDENT, INCLUDES ANY PERSON IN INDIA - (A) WHO IS EMPLOYED BY OR ON BEHALF OF THE NON- RESIDENT; OR (B) WHO HAS ANY BUSINESS CONNECTION WITH THE NON- RESIDENT; OR (C) FROM OR THROUGH WHOM THE NON-RESIDENT IS IN RECEIPT OF ANY INCOME, WHETHER DIRECTLY OR INDIRECTLY; OR (D) WHO IS THE TRUSTEE OF THE NON-RESIDENT; AND INCLUDES ALSO ANY OTHER PERSON WHO, WHETHER A R ESIDENT OR NON-RESIDENT, HAS ACQUIRED BY MEANS OF A TRANSFER, A CAPITAL ASSET IN INDIA: PROVIDED THAT A BROKER IN INDIA WHO, IN RESPECT OF ANY TRANSACTIONS, DOES NOT DEAL DIRECTLY WITH OR ON BEHA LF OF A NON- RESIDENT PRINCIPAL BUT DEALS WITH OR THROUGH A NON- RESIDENT BROKER SHALL NOT BE DEEMED TO BE AN AGENT UNDER THI S SECTION IN RESPECT OF SUCH TRANSACTIONS, IF THE FOLLOWING COND ITIONS ARE FULFILLED, NAMELY:- (I) THE TRANSACTIONS ARE CARRIED ON IN THE ORDINARY COURSE OF BUSINESS THROUGH THE FIRST-MENTIONED BROKER; AND (II) THE NON-RESIDENT BROKER IS CARRYING ON SUCH TRANSACTIONS IN THE ORDINARY COURSE OF HIS BUSINESS AND NOT AS A PRINCIPAL. I.T.A. NOS. 2220 TO 2223/MDS/10 9 [EXPLANATION FOR THE PURPOSES OF THIS SUB-SECTION , THE EXPRESSION BUSINESS CONNECTION SHALL HAVE THE MEA NING ASSIGNED TO IT IN EXPLANATION 2 TO CLAUSE (I) OF SUB-SECTION (1) OF SECTION 9 OF THIS ACT.] (2) NO PERSON SHALL BE TREATED AS THE AGENT OF A NO N-RESIDENT UNLESS HE HAS HAD AN OPPORTUNITY OF BEING HEARD BY TH E ASSESSING OFFICER AS TO HIS LIABILITY TO BE TREATED AS SUCH. 12. SUB-SECTION (2) OF SECTION 163 CLEARLY MENTIONS THAT BEFORE A PERSON IS TREATED AS AN AGENT OF A NON-RESIDENT, HE HAS TO BE GIVEN AN OPPORTUNITY OF BEING HEARD, AS TO HIS LIABILITY TO BE TREATED AS SUCH. IN OTHER WORDS, THIS IS, IN OUR OPINION, SIMILAR TO TH E REQUIREMENT UNDER SECTION 43 OF 1922 ACT, WHICH MANDATED THAT THE A.O . HAD TO GIVE A NOTICE OF HIS INTENTION OF TREATING A PERSON AS AN AGENT OF THE NON- RESIDENT. IN THE CASE BEFORE THE HON'BLE APEX COUR T, THE APPOINTMENT OF THE RESPONDENT WAS ONLY AS AN AGENT OF THE NON-R ESIDENT FOR ASSESSMENT YEAR 1961-62 AND THERE WAS NO APPOINTMEN T FOR ANY SUBSEQUENT YEARS. HON'BLE APEX COURT IN PARA 3 OF ITS ORDER, HELD AS UNDER:- 3. ON BEHALF OF THE APPELLANT MR. SUKUMAR MITRA ADD RESSED THE ARGUMENT THAT AN APPOINTMENT MADE UNDER S. 43 O F THE ACT WAS GOOD FOR ALL PURPOSES OF THE ACT AND THEREFORE ALSO FOR THE PURPOSE OF S. 18A OF THE ACT. IT WAS SAID THAT UND ER S. 18A, ADVANCE PAYMENT OF TAX IS LIABLE TO BE MADE IN THE C URRENT FINANCIAL YEAR, THAT THE ASST. YR. 1961-62 IS THE SA ME AS THE FINANCIAL YEAR 1961-62, AND THAT FOR THE SAID FINANC IAL YEAR IN WHICH THE ADVANCE PAYMENT OF TAX WAS CALLED TO BE MA DE BY THE RESPONDENT, THERE WAS ALREADY AN APPOINTMENT OF THE RESPONDENT I.T.A. NOS. 2220 TO 2223/MDS/10 10 AS THE STATUTORY AGENTS OF THE NON-RESIDENT FIRMS, T HE ADVANCE PAYMENT OF TAX WAS RIGHTLY DEMANDED FROM THE RESPONDE NT. THE APPOINTMENT OF THE RESPONDENT UNDER S. 43 OF THE AC T WAS MADE ON 21 ST OCT., 1961, AND THE NOTICES OF DEMAND IN THE PRESE NT CASE WERE ISSUED ON 2/3 RD NOV.,1961, AND THEREFORE SUBSEQUENT TO THE SAID APPOINTMENT. IT WAS, THEREFORE, CONTENDED THA T THE ADVANCE PAYMENT OF TAX WAS PROPERLY DEMANDED FROM THE RESPOND ENT AND THE RESPONDENT COULD NOT CHALLENGE THE NOTICES ISSU ED TO IT. IN OUR OPINION, THERE IS NO WARRANT OR JUSTIFICATION F OR THE ARGUMENT ADVANCED ON BEHALF OF THE APPELLANT. THE LIABILITY IMPOSED UPON A PERSON BY HIS APPOINTMENT AS A STATUTORY AGENT UNDER S. 43 OF THE ACT IS ONLY IN RESPECT OF THE LIABILITY FOR THE ASSES SMENT YEAR FOR WHICH THE APPOINTMENT IS MADE. THE APPOINTMENT OF THE RESPONDENT FOR THE ASST. YR. 1961-62 WAS IN RESPECT OF THE LIABILITY OF THE NON-RESIDENT FIRMS FOR THE INCOME O F THE PREVIOUS YEAR FOR THE SAID ASST. YR. 1961-62. HAVING REGARD T O THE SCHEME OF THE ACT, THE ASSESSMENT FOR EACH YEAR IS SELF-CON TAINED AND THE VICARIOUS LIABILITY IMPOSED BY AN APPOINTMENT UN DER S. 43 OF THE ACT ONLY EXTENDS TO THE LIABILITY FOR THE ASSESSM ENT OF THE YEAR FOR WHICH THE APPOINTMENT IS MADE AND CANNOT EX TEND TO THE LIABILITY FOR ANY OTHER ASSESSMENT. NOR CAN THE EXPR ESSION FOR ALL PURPOSES USED IN S. 43 OF THE ACT EXTEND THE L IABILITY TO ANY OTHER ASSESSMENT EXCEPTING THE LIABILITY FOR THE ASS ESSMENT YEAR FOR WHICH THE APPOINTMENT IS MADE. THE EXPRESSION FOR ALL PURPOSES, IN OUR OPINION, ONLY INDICATES THAT WHEN AN APPOINTMENT IS MADE FOR A PARTICULAR ASSESSMENT YEAR IT IS GOOD FOR ALL PURPOSES AS FAR AS THAT ASSESSMENT IS CONCERNED, I. E., FOR ALL PURPOSES FOR IMPOSING TAX LIABILITY, DETERMINING THE QUANTUM OF THE LIABILITY AND FOR RECOVERING IT. THE LIABILITY SOUGHT TO BE IMPOSED UNDER S. 18A OF THE ACT IS NOT IN RESPECT O F THE INCOME- TAX FOR THE ASSESSMENT YEAR FOR WHICH THE APPOINTMEN T IS MADE BUT FOR A SUBSEQUENT ASSESSMENT YEAR. FOR THE RECOV ERY OF INCOME-TAX OF THE SAID SUBSEQUENT YEAR, UNLESS THERE IS A FRESH APPOINTMENT OF THE RESPONDENT UNDER S. 43 OF THE AC T AS A STATUTORY AGENT, NO SUCH LIABILITY CAN BE IMPOSED ON THE RESPONDENT BY THE IT AUTHORITIES. IT IS TRUE, AS MR . SUKUMAR MITRA CONTENDS, THAT ADVANCE TAX WHICH IS REQUIRED TO BE PAID UNDER S. 18A IS CHARGED DURING THE FINANCIAL YEAR. BUT IT MUST BE REMEMBERED THAT IT IS CHARGED NOT IN RESPECT OF THE PREVIOUS YEAR FOR WHICH THE FINANCIAL YEAR IS THE PROPER ASSES SMENT YEAR I.T.A. NOS. 2220 TO 2223/MDS/10 11 BUT IT IS CHARGED FOR THE TAX LIABILITY OF THE SUBSE QUENT YEAR. IN THE PRESENT CASE, IT IS ADMITTED THAT THERE WAS NO APPOINTMENT OF THE RESPONDENT UNDER S. 43 OF THE ACT AS STATUTORY A GENT OF THE TWO GERMAN FIRMS FOR THE ASST. YR. 1962-63. NO NOTI CE WAS SERVED UPON THE RESPONDENT UNDER S. 43 OF THE ACT I NTIMATING TO THE RESPONDENT THAT THE APPELLANT INTENDED A TREAT IT AS THE AGENT OF THE NON-RESIDENT GERMAN FIRMS FOR THE ASST . YR. 1962- 63. NO OPPORTUNITY WAS GIVEN TO THE RESPONDENT TO B E HEARD IN THE MATTER, NOR WAS ANY FORMAL ORDER PASSED UNDER S. 43 OF THE ACT BY THE APPELLANT TREATING THE RESPONDENT AS THE AGENT OF THE NON-RESIDENT GERMAN FIRMS FOR THE ASST. YR. 1962-63 . ALTHOUGH A PERSON MAY FALL IN A PARTICULAR YEAR TO RESIST THE CL AIM THAT HE IS AN AGENT, CIRCUMSTANCES MAY ALTER IN THE NEXT YEAR AN D HE MAY BE ABLE TO RESIST THE CLAIM THEN. HENCE NOTICE SHALL HAVE TO BE GIVEN BY THE ITO FOR EACH ASSESSMENT YEAR TO APPOINT A PERS ON AS AGENT. IF FOLLOWS, THEREFORE, THAT THE RESPONDENT COULD NOT BE TREATED AS AN AGENT OF THE TWO GERMAN FIRMS FOR THE ASST. YR. 1962-63 AND ADVANCE TAX COULD NOT BE DEMANDED UNDER S. 18A OF THE ACT FOR THAT ASSESSMENT YEAR TREATING THE RESPON DENT AS SUCH STATUTORY AGENT. WE ARE, ACCORDINGLY, OF THE OP INION THAT THE NOTICES OF DEMAND ISSUED BY THE APPELLANT TO THE RESPONDENT DT. 5 TH SEPT.,1961, WERE ILLEGAL AND ULTRA VIRES AND RIGHT LY QUASHED BY THE HIGH COURT BY THE GRANT OF A WRIT IN THE NATUR E OF CERTIORARI UNDER ART. 226 OF THE CONSTITUTION. 13. IT IS THUS CLEAR, FROM THE ABOVE RULING OF HON' BLE APEX COURT THAT THERE HAS TO BE AN APPOINTMENT OF AN AGENT AS AGENT OF NON-RESIDENT FOR EACH YEAR AND SUCH APPOINTMENT HAS TO BE DONE A FTER GIVING AN OPPORTUNITY OF BEING HEARD. ADMITTEDLY, THERE WAS NO SUCH APPOINTMENT DONE FOR ANY YEARS HERE, OTHER THAN ASS ESSMENT YEAR 2002-03. IN THE ABSENCE OF SUCH APPOINTMENT, IN OU R OPINION, THE ASSESSMENTS DONE ON THE ASSESSEE, IN ITS CAPACITY A S AN AGENT OF I.T.A. NOS. 2220 TO 2223/MDS/10 12 M/S BENGAL TIGER LINE LIMITED, CYPRUS, WERE BAD IN LAW FOR ASSESSMENT YEARS 2005-06, 2006-07 AND 2007-08. 14. TO SUMMARIZE, WE QUASH THE ASSESSMENTS DONE FOR ALL THE YEARS FOR REASONS CITED ABOVE. 15. SINCE WE HAVE QUASHED THE ASSESSMENTS ON QUESTI ONS OF LAW RAISED BY THE ASSESSEE, OTHER GROUNDS ON THE MERITS OF THE CASE, ARE NOT DEALT WITH. INCIDENTALLY, SUCH GROUNDS WERE AL SO NOT ARGUED BY THE LEARNED COUNSEL FOR THE ASSESSEE. 16. IN THE RESULT, ALL THE FOUR APPEALS FILED BY TH E ASSESSEE STAND ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 20 TH MAY, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 20 TH MAY, 2011. KRI. COPY TO: APPELLANT/RESPONDENT/ADIT, INTERNATIONAL TAXATION, CHENNAI-34/D.R./GUARD FILE