S.P. Goyal, J.
1. Hazoora Singh was treated as the agent of Mohinder Singh, a non-resident, under Section 163 of the Income-tax Act, vide order dated March 21, 1970. He had purchased agricultural land in the name of Mohinder Singh on September 15, 1966, at a total expense of Rs. 96,000. Hazoora Singh, his agent, was issued a notice under Section 148 as representative assessee and he filed the return showing nil income on behalf of the non-resident. However, in the statement recorded by the Income-tax Officer, he detailed the source of the sale consideration as under :
Income from land ofnon-resident. which is in possession of the assessee.
Loan advanced by the wife of thenon-resident.
Loan taken from one Joginder Singh.
Loan taken from Shri Mohinder Singh.
Loan from Shri Homojit Singh.
Contribution by the assesseefromhis own funds.
2. Before the assessment proceedings were completed, the sale in favour of the non-resident was pre-empted and the assessee got back the consideration of Rs. 96,000. The Income-tax Officer did not accept the version of the assessee and included in his assessment, the entire amount as income of the non-resident from undisclosed sources. On appeal, the Appellate Assistant Commissioner upheld the genuineness of the loan raised from Mohinder Singh and deleted the amount of Rs. 20,000 from the assessed income. The finding of the Income-tax Officer regarding the remaining amount was affirmed. The appeal filed before the Tribunal also failed. The assessee then moved an application under Section 256(1) of the Income-tax Act and the following three questions have been referred for our opinion :
'(i) Whether the Tribunal was right in holding that the assessment had been made on the applicant as agent of the non-resident within the statutory period of limitation ?
(ii) Whether the Tribunal was right in holding that liability of the agent appointed under Section 163 is retrospective and the agent is liable for all omissions of the non-resident prior to the period of his appointment as agent ?
(iii) Whether, in view of the finding of the Income-tax Appellate Tribunal, that the agent had no business connection with the non-resident, the agent is liable to be assessed in respect of all the income of the nonresident which was not earned by the non-resident through the agent '
3. Question No. (i).--A notice under Section 148 of the Income-tax Act, in the case of a person treated as non-resident under Section 163, is required to be issued before the expiry of a period of two years from the end of the relevant assessment year. The relevant assessment year in the present case is 1967-68 and a notice was issued before the end of March, 1970. The limitation for assessment as provided in Sub-section (2)(a) of Section 153 is four years from the end of the assessment year in which the notice under Section 148 was served. The notice, as stated above, was served within the period of limitation before the end of March in the year 1970. Therefore, the assessment completed on March 30, 1974, was rightly held to have been completed within the statutory period of four years from the end of the assessment year in which the notice under Section 148 was served. Question No. (i) is accordingly answered against the assessee and in favour of the Revenue.
4. Question No. (ii).--The question has also to be answered against the assessee but on reasons different from those given by the Tribunal. The argument of the assessee before the Tribunal was that as he was appointed an agent for the non-resident by the Income-tax Officer by an order dated March 21, 1970, he was not liable to file any return under Section 139 on behalf of the non-resident prior to that date. His contention was negatived on the ground that he had stepped into the shoes of the non-resident for all purposes once he was appointed as agent undersection 163 and became liable to do all that which should have been done by the non-resident. As the non-resident was liable to file the return under Section 139 long before March 31, 1970, so would be his agent. We need not opine whether the views of the Tribunal are sustainable in law or not because this order has has to be sustained on different reasons mentioned hereinafter.
5. The Tribunal wrongly proceeded on the premises that Hazoora Singh was appointed agent under Section 163 on March 21, 1970. Section 163 does not define an agent but only provides as to who could be included in the term 'agent' in relation to a non-resident. The provisions of Section 163 are, therefore, inclusive and do not define the term ' agent'. Therefore to find out the definition of the term ' agent ', we have to fall back on the provisions of the Indian Contract Act. Section 182 of the said Act defines the agent as a person employed to do any act for another or to represent another in dealing with third persons. For the appointment of an agent, it is not necessary that there must be written authorityand it was not disputed that the appointment can be made even orally. When Hazoora Singh purchased the land on September 15, 1966, in the name of Mohinder Singh, a non-resident, he obviously acted as the agent of the latter and was, therefore, his agent on the said date within the meaning of Section 163. So the order passed on March 21, 1970, by the Income-tax Officer did not clothe him with the capacity of an agent of the non-resident, even though by this order he was treated as agent of the nonresident. In the capacity of the agent of the non-resident, he would be a representative assessee within the meaning of Section 160 right from the date on which he acted as agent of the non-resident and purchased the land in his name. For a person to be the representative assessee within the meaning of Section 160, it is not necessary that he must have been treated as agent under Section 163 because the agent of a non-resident is the representative assessee in respect of the income of the non-resident irrespective of the fact whether he has been treated as agent under Section 163 or not. It is only in addition to an agent of the non-resident that persons who are treated as agents under Section 163 are also included in the definition of representative assessee within the meaning of Section 160(1)(i) of the Act. Hazoora Singh was, therefore, a representative assessee in respect of the income of Mohinder Singh, a non-resident, during the accounting year as well as the assessment year and as such was liable to file the return under Section 139 within the prescribed period. Question No. (ii) is accordingly answered against the assessee and in favour of the Revenue.
6. Question No. (iii).--The legal objection, the subject-matter of this question, raised before the Tribunal was that as the income sought to be assessed was not covered by the provisions of Section 9(1)(i), it could not be included in the assessment of the non-resident. The said Clause (i) provides that all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India or through the transfer of a capital asset situate in India shall be deemed to accrue or arise in India. The argument of the assessee that no income having accrued or arisen or deemed to have accrued or arisen through business connection in India, the amount in dispute could not be said to be an income accrued or arisen in India within the meaning of Section 9 of the Act. The Tribunal held that the income from undisclosed sources by virtue of the provisions of Section 14F would also be income deemed to have accrued or arisen in India within the meaning of Section 9. The learned counsel for the assessee, however, urged that in the case of a non-resident who has no business connection in India, the question of any income accruing to him from undisclosed sources could not possibly ariseand as such the provisions of Section 14F cannot be invoked in his case to include any amount in his assessment as income from undisclosed sources. We find it difficult to accept the contention raised. The provisions of Section 5(2)(b) lay down that subject to the other provisions of the Act, the total income of any previous year of a person who is a non-resident includes income from whatever source derived which accrues or arises or is deemed to have accrued or arisen in India during such year. It is, therefore, evident that even if there is no known or disclosed source of income, the income would still be deemed to have accrued to a nonresident of India from undisclosed sources if it is actually found in the hands of his representative assessee. It is not necessary for us to dilate upon the point any more because it stands concluded by a decision of the Supreme Court in Barendra Prasad. Ray v. ITO : 129ITR295(SC) , wherein it was held that sections 9(1) and 163 are comprehensive enough to include all heads of income mentioned in Section 14.
7. The Tribunal, therefore, rightly held that the income accruing to thenon-resident from undisclosed sources would also be covered by the provisions of Section 9(1)(i) and liable to be included in his assessment. Thisquestion as well is answered in favour of the Revenue and against theassessee. In the circumstances of the case, the parties are left to beartheir own costs.
G.C. Mital, J.
8. I agree.