ORDER
O.P. Jain, Judicial Member
1. This appeal is directed against the order of the Commissioner of Income-tax (Appeals) dated 2-5-1988, pertaining to the assessment year 1983-84.
2. The assessment was completed by the Income-tax Officer by treating the appellant as an agent of M/s. Nedlloyd Lines B.V., a non-resident company. An appeal was preferred before the CIT (Appeals) and it was pleaded that no opportunity was provided as required under Section 163(2) of the IT Act, 1961 and as such, the ITO has committed an error in treating the appellant as an agent for the non-resident company and therefore, the assessment framed is bad in law and invalid. The contention of the appellant did not find favour with the CIT (Appeals). He has noted that a statement of advance-tax in Form No. 28A was filed by the appellant in his capacity as an agent of the non-resident company. He has also noted that an estimate of advance-tax was also filed by the appellant in the status of agent of the non-resident company and the tax was accordingly paid. It was also found that during the assessment proceedings the ITO had issued letters, dated 24-8-1985 and 11-11-1985, describing the appellant as an agent of the said non-resident company and compliance of such letters was made. It had also come on record that an application for Port Clearance Certificate for each voyage and the application for quara-ntee bond was signed by the appellant company as an agent of the non-esident company. Considering these facts, the CIT (Appeals) opined that the appellant is an agent of the non-resident company and as such, the assessment framed is in order. He has also observed that the issue of notice under Section 163(2) of the Act is only procedural and since the appellant had admitted itself as an agent of the non-resident company, the assessment cannot be held to be invalid merely for want of notice under Section 163(2) of the Act. In taking this view, he drew support from the following decisions:
(1) Habib and Sons v. CIT [1963] 49 ITR 792 (Bom.)
(2) Harakchand Makanji and Co. v. CIT [1948] 16 ITR 119 (Bom.).
3. Thus the appeal was dismissed. Dissatisfied, the appellant preferred an appeal before the Tribunal.
4. The learned advocate for the assessee has argued that no notice under Section 163(2) of the Act was issued by the ITO. Thus the assessee was deprived of an opportunity of being heard and, therefore, the assessment framed is invalid. Acccording to him the issue of notice under the said provision is necessary. He has also argued that the assessee was only a commercial agent of the non-resident company and he was not an agent appointed for the purposes of Income-tax Act. By filing a copy of the return, it has been pointed out that the return of income was filed by the nonresident company and not by the appellant. It is also pointed out that although Form No. 28A was filed by the assessee on 14-2-1982, but the same was regularised by the non-resident company by filing such form under his own signature and the same was filed on 24-2-1992, a copy of which has been brought on record. Similarly, it has been pointed out that originally Form Nos. 29 was filed by the appellant on 15-12-1982 but another form duly signed by the non-resident company was subsequently filed. According to him on the basis of Form Nos. 28A and 29 filed by the appellant, it cannot be held that the assessee was the agent of the non-resident company and there was no need for the ITO to issue notice under Section 163(2) of the Act. On the other hand, the learned Departmental Representative has submitted that in Form No. 28A filed by the appellant, the appellant had described its status as ‘agents’. Similarly in Form No. 29 the appellant had stated itself as an agent of the non-resident company. Thus, it has been contended that the appellant had admitted itself to be an agent and, therefore, there was nothing wrong in the action of the ITO in treating the assessee as an agent. In such situation, it has been argued that it was not necessary for the ITO to issue a notice under Section 163(2) of the Act. In support of this stand reliance was placed on the decisions already indicated above.
5. We have considered the rival submissions. In Harakchand Mokanji & Co.’s case (supra) the High Court of Bombay has held that notice and opportunity are only procedural steps. If the agent submits a return admitting his status as such, he cannot afterwards claim of want of notice. In the instant case Form No. 28A was filed by the assessee on 14-6-1988. This form was filed by the constituted attorney of the appellant for and on behalf of the non-resident company and below the signature the status was mentioned as ‘Agents’. Similarly in Form No. 29 filed by the appellant, in the space meant for mentioning the status, the word ‘Agents’ has been mentioned. These forms were filed for and on behalf of the non-resident company by the constituted attorney of the appellant company. It is thus evident that while filing these forms, the appellant had represented itself as an agent of the non-resident company. The issue of notice and opportunity of hearing as provided in Section 163(2) of the Act are only procedural steps. In the given situation, we are of the opinion that the assessee is not entitled to complain that no opportunity of hearing was provided as required under the said section.
6. It was next argued that the ITO did not pass any order treating the assessee as an agent of the non-resident company. According to the learned advocate for the assessee such an order has to be passed by the ITO before completing the assessment. He has pointed out that under the Act of 1961 an appeal is provided against such an order and unless there is an order, no appeal can be filed. It was thus contended that passing of an order treating the person as an agent of the non-resident company is a mandatory requirement. In the instant case no such order was passed by the ITO and as such, it has been argued that the assessment framed is invalid and deserves to be quashed. In support of this stand reference was made to the decision of the Bombay High Court in CIT v. Belapur Sugar and Allied Industries Ltd. [1983] 141 ITR 404 : [1982] 11 Taxman 140.
7. On the other hand, the learned Departmental Representative has supported the order of the CIT (Appeals). He has argued that it is established by evidence on record that the assessee was acting as an agent of the non-resident company and as such there was no need to pass a separate order and the appellant is in no way prejudiced by non-passing of the order.
8. We have given our anxious consideration to the rival submissions. We find that under the Act of 1922, there was no separate right of appeal on the point of treating a person as an agent in anticipation of the assessment on him, but the question could be raised in the course of the appeal against the assessment. But under the Act of 1961, right of appeal has been provided against such an order. Since the right of appeal has been provided against such an order, it is manifest that there has to be an order and only then an appeal can be filed. No appeal can be filed unless an order comes into being. Thus an order in writing treating the representative assessee as an agent of the non-resident company is necessary. Even if a person without being called upon to submit a return voluntarily submits a return as agent of a non-resident company, the necessity to pass an order recognising him as an agent cannot be dispensed with. Having regard to the express provision which creates a vicarious liability on the representative assessee, to be liable to tax, the necessity to provide him with an order treating him as an agent of the non-resident becomes all the more important. Authority for this proposition is available in the following decisions:
CIT v. Kanhaya Lal Gurmukh Singh [1973] 87 ITR 476 (Punj. and Har.); CIT v. Express Newspapers (P.) Ltd. [1978] 111 ITR 347 (Mad.); Belapur Sugar and Allied Industries Ltd. (supra).
In the instant case, no such order was passed by the Assessing Officer. This being so, the assessment order passed by the Assessing Officer has to be quashed and we order accordingly.
9. In the result, the appeal is allowed.