Home › Tax Laws › DIT v. Board of Control for Cricket in Sri Lanka Through PILCOM ( 2018) 259 Taxman 6/ 305 CTR 965/ 172 DTR 325(Cal)(HC)

DIT v. Board of Control for Cricket in Sri Lanka Through PILCOM ( 2018) 259 Taxman 6/ 305 CTR 965/ 172 DTR 325(Cal)(HC)

S. 9(1)(i): Income deemed to accrue or arise in India – Business connection- Reassessment -A representative assessee represents all income of a non-resident accruing or arising in India directly or indirectly from any business connection in India. It is wrong to contend that the representative assessee is not liable for income which has directly arisen or accrued in India. It is also wrong that if the department chooses to make an assessment of the person resident outside India directly, it cannot assess the agent or representative assessee. The Dept has the choice of proceeding against either- Order of Tribunal is set aside [ S.5, 147,148, 160,163

Question before the High Court  was :

“Whether on the facts and in the circumstances of the case the Learned Tribunal erred in law in cancelling the order of assessment under section 147 passed by the Assessing Officer without considering its earlier decision wherein the Learned Tribunal held that the order under Section 163 treating PILCOM as agent of Non-Resident Boards and players was valid?”

Allowing the appeal of the revenue the Court observed that ,the Tribunal, in our opinion, made a clear mistake in believing that since it was held in an earlier proceeding that the income in question arose in India, a representative assessee could not be liable because it was only liable according to it in respect of the income which was deemed to have arisen in India. The effect of the order of the Tribunal is that inspite of a foreign resident having an agent in India and income directly arising in this country to the foreign resident, the agent would escape liability to assessment. In those circumstances, the order of the Tribunal dated 6th June, 2007 is set aside. The questions of law framed by the order of this Court dated 26th August, 2008 are answered in the affirmative in favour of the Revenue. The orders of the Assessing Officer and of the Commissioner of Income Tax (Appeals) are affirmed. The points left open by the tribunal in its impugned order may be decided by it in accordance with law.  ( ITANo.279 of 2008 & ITA No.242 of 2008, dt 25.09.2018)

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