tion No 67 of 1965
Petition under article 32 of the Constitution of India for enforcement of the fundamental rights
MC Chagla FN Kaka OP Malhotra and JB Dadachanji for the petitioner
B Sen TA Ramachandran and RN Sachthey for the respondents
The Judgment of the Court was delivered by Shah J
On  February 25 1965 the Income tax Officer Companies Circle I  3  Bombay directed that for the purpose of the Income tax Act 1961 the Premier Automobiles Ltd hereinafter called the Company be treated as an agent of Ms Dodge Brothers of United Kingdom a non resident Company
On the same day the Income tax Officer issued a notice of demand under section 156 read with section 210 of the Act calling upon the Company to pay on or before March 1 1965 advance tax of Rs 1151235 91 as agent of the foreign principal during the financial year 1964 65
The Company then moved a petition in this Court for an order quashing and setting aside the order under section 163 and notice of demand under section 156 for the assessment year 1965 66 and for an injunction or prohibition restraining the Income tax Officer from enforcing or implementing the order under section 163 and the notice under section 156 read with section 210 of the Incometax Act 1961
The petition was resisted by the Income tax Officer
In support of the petition counsel for the Company raised two contentions 1 that under sections 209 and 210 of the Indian Income tax Act 1961 no order for payment of advance tax can be made against an agent of a non resident and 2 that a provision which authorises collection of advance tax from an agent of a non resident infringes the equality clause of the Constitution and is on that account void
Sections 207 and 208 of the Income tax Act 1961 insofar as they are material provide  207 1 Tax shall be payable in advance in accordance with the provisions of sections 208 to 219 in the case of income other than income chargeable under the head Capital gains 208 Advance tax shall be payable in the financial year a where the total income exclusive of capital gains of the assessee referred to in sub clause i of clause a of section 209 exceeded the maximum amount not chargeable to income tax in his case by two thousand five hundred rupees or b      
Section 209 sets out the rules for computation of amount of advance tax payable by an assessee in the financial year
Section 210 provides by sub section
1 Where a person has been previously assessed by way of regular assessment under this Act or under the Indian Income tax Act 1922 the Income tax Officer may on or after the 1st day of April in the financial year by order in
writing require him to pay to the credit of the Central Government advance tax determined in accordance with the provisions of sections 207 208 and 209
 Section 207 208 209 and 210 prescribe machinery for imposition of liability for and determination of the quantum of advance tax in respect of income which is chargeable to income tax in the hands of a person on regular assessment
Under the Income tax Act 1961 a person is liable to be
assessed to tax in respect of his own income and also in respect of certain classes of income received by or accruing or arising others
He is also liable to be assessed to tax as a representative assessee
That is expressly so enacted by section 161 1  which provides Every representative assessee as regards the income in respect of which he is a representative assessee shall be subject to the same duties responsibilities and liabilities as if the income were income received by or accruing to or in favour of him beneficially and shall be liable to assessment in his own name in respect of 356 that income but any such assessment shall be deemed to be made upon him in his representative capacity only   A representative assessee by sub section
1  of section 160 includes amongst others the agent of a non resident in respect of the income of a non resident specified in section 9 1 i and also a person who is treated as an agent under section 163
By sub section
2 a representative assessee is deemed to be an assessee for the purpose of the Act
By section 162 the representative assessee who as such pays any sum under the Act may recover the sum so paid from the person on whose behalf it is paid
Section 1631 defines for the purposes of the Act an agent in relation to a non resident
Resort to the machinery for assessing a representative assessee is however not obligatory it is open to the Income tax Officer to make a direct assessment of the person on whose behalf or for whose benefit income therein referred to is receivable or to recover from such person the tax payable in respect of such income
On regular assessment an agent of a non resident is by virtue of section 1601 read with section 163 liable to be assessed to tax and the tax so assessed may be recovered from him
The agent if assessed to tax has the right to recover tax paid by him from the person whom he represents section 162
Since a non resident is in respect of income which forms part of his total income liable to be assessed to tax he may also be called upon to pay advance tax in respect of the income accruing to
or received by him which forms part of his total income chargeable to tax by virtue of sections 4 5 and 207
So far there is no dispute
Counsel for the Company however urged that an agent of a non resident may be assessed in regular assessment in respect of the income accruing
or arising to his principal
but he cannot be called upon to pay advance tax even though he is by virtue of section 1602 deemed an assessee for the purposes of the Act
Diverse reasons were suggested in support of that argument
It was said that since under section 209 1  the amount of advance tax payable by an assessee in the financial year is to be computed on his total income of the latest previous year in respect of which he has been assessed by way of regular assessment an agent cannot be directed to pay advance tax the incidence of liability whereof depends upon the determination of total income of the principal
We fail to see any substance in this argument
Section 207 imposes liability for payment of advance tax and section 208 prescribes the conditions of liability to
pay advance tax
Determination of total income of the previous year of the assessee is not made a condition of the liability to pay advance tax
Advance tax payable by an assessee is computed in the manner provided by section 209 when the assessee has been previously assessed to tax
The Income tax Officer is also enjoined by section 210 to issue a notice to a person who has been 357 previously assessedby way of regular assessment to pay advance tax for the financial year
If the assessee has not been previously assessed by way of regular assessment he is required by section 2123 to make an estimate of his total income excluding capital gains if it is likely to exceed the maximum amount not chargeable to tax by two thousand five hundred rupees These provisions apply to all assessees
If an assessee is chargeable to tax in respect of his own income or income of others which is chargeable to tax as his own income those provisions indisputably apply
It is expressly enacted by section 161 that as regards income in respect of which a person is a representative assessee he shall be subject to the same duties responsibilities and liabilities as if the income were income received by or accruing to or in favour of him beneficially
It is clearly implicit therein that a representative assessee is not exempt from liability to pay advance tax
of the liability to pay advance tax it is not predicated that the previous year should have come to
an end before liability can arise
The previous year of an assessee may in some cases end
after the commencement but before the end of a financial year in which advance tax is payable it may in other cases commence and end with the financial year
But the liability to pay advance tax
is not in any manner affected because the previous year ends before or with the financial year
Where an assessees previous year is the financial year his total income may not be determined for the previous year before the commencement of the financial year but on that account no exemption from payment of advance tax is granted by the Act
On the commencement of a financial year a person who is previously assessed to tax is liable to pay advance tax on demand by the Income tax Officer under section 210
The quantum of tax will be determined by section 209 and will be adjusted in the manner provided by section 2103
That applies to every assessee Whether the tax is liable to be paid by him on his own total income or on the income assessedin his hands as a representative assessee
If he has not been previously assessed in the character in which he is liable to pay tax an obligation is imposed by section 2123 upon him to make an estimate of his income and to pay advance tax
That provision also applies to his own income and also to the income in respect of which he is a representative assessee
There is nothing in the Act under which the liability to pay advance tax of a representative assessee depends upon determination of the total income for the previous year
An argument of hardship was also raised
It was said that an agent of a non resident may not normally have in his possession any materials on which he may estimate the income in respeet of which he may be chargeable to advance tax if he has not been previously assessed to tax as an agent of a non resident
That again in our judgment is not a ground which exempts an 358 agent from liability to pay advance tax on behalf of his principal
Liability to submit an estimate necessarily implies the duty to secure the requisite information from the non resident for submitting the estimate
The tax it must be remembered is assessed on the agent for and on behalf of the principal and the Act has made an express provision enabling the agent to recover from the principal the tax so paid by him
Once the Income tax Officer treats a person as an agent of a non resident liability to pay tax on regular assessment arises and his liability as a representative assessee to pay advance tax is not excluded by any provision of the Act
In our judgment sections 207 and 208 which impose liability to pay advance tax in a financial year section 210 which authorise the Income tax Officer to make a demand for payment of advancetax from a person who is previously assessed and section 2123 which imposes the duty to make an estimate of the total income likely to be received or to accrue or arise and to pay advance tax if the total estimated income exceeds the maximum amount not chargeable to tax in his case by Rs 2500 apply to every person whether he is assessed in respect of his own income or as a representative assessee and we are unable to imply an unexpressed limitation on the express words of the statute in favour of an agent of a non resident principal
In the present case by order dated February 25 1965 for the assessment year 1964 65 the Company was treated as an agent of the non resident principal
Since the Company was treated as an agent of the non resident it became liable to pay advancetax in the financial year 1964 65
By virtue of section 207 read with section 208 the declaration that the Company was an agent involved liability to pay advance tax as well as tax assessed on regular assessment
We are unable to hold that the liability to pay advance tax did not arise against the Company
The plea that the provisions imposing liability to pay advancetax upon an agent of a non resident infringe the equality clause of the Constitution has No substance
As already observed the liability to pay advance tax arises under sections 207 and 208 and its quantum is determined by sections 209 210 and 2123 and it is not predicated of the accrual of liability that the total income of the previous year should be ascertained or precisely ascertainable when demand is made by the Income tax Officer under section 210 or when the assessee is required to
make an estimate
The assumption that an assessee whose year of account coincides with the financial year is not in respect of that year liable to pay advancetax is not warranted
The computation of advance tax is not dependent upon the completion of the previous year it depends upon the rules prescribed by sections 209 210 and 212
Every person who has been previously assessed to tax is liable when ordered 359 by the Income tax Officer to pay advance tax subject to the right to make an estimate under section 212 1 
A person who has not been previously assessed but whose income is likely to exceed the specified amount is also liable to pay advance taX
The Act does not accord discriminatory treatment between different assessees
Payment of advance tax is on account and is always liable to be adjusted against the tax assessed on regular assessment
That again applies
to all assessees
It is then difficult to appreciate the grounds on which the plea of denial of equal protection may be sustained
The only ground urged that an assessee may escape liability to pay advance tax where his previous year coincides with the financial year is without substance and no other ground is set up in support of the plea of violation of the guarantee of equality under article 14 of the Constitution
The petition therefore fails and is dismissed with costs
GC Petition dismissed


Summary:
The Income tax Officer Companies Circle Bombay treating the petitioner as an agent of a non resident issued a notice of demand under section 156 read with section 210 of the Indian Income tax Act 1961
By this notice the petitioner was called upon to pay advance tax as agent of the foreign principal during the financial year 1964 65
The petitioner filed a petition under article 32 of the Constitution challenging the demand
The contentions
in support of the petition were i that under sections 209 and 210 of the Indian Income tax Act 1961 no order for payment of advance tax can be made against an agent of a non resident ii that a provision which authorises collection of advance tax from an agent of a non resident infringes the equality clause of the Constitution
In support of the first contention it was urged that since under section 2091 the amount of advance tax payable by an assessee in the financial year is to be computed on his total income of the latest previous year in respect of which he has been assessed by way of regular assessment an agent cannot be directed to pay advance tax the liability whereof depends upon the determination of total income of the principal
HELD i Sections 207 and 208 which impose liability to pay advance tax in a financial year section 210 which authorises the Income tax Officer to make a demand for payment of advance tax from a person who is previously assessed and section 2123 which imposes the duty to make an estimate of the total income likely to be received or to accrue or arise
and to pay advance tax if the total estimated income exceeds the maximum amount not chargeable to tax in his case by Rs 2500apply to every person whether he is assessed  in respect of his own income or as a representative assessed and it is not possible to imply in the application of these provisions an unexpressed limitation on the express words of the statute in favour of an agent of a non resident principal
358 C D It is expressly enacted by section 161 that as regards income in respect of which a person is a representative assessee he shall be subject to the same duties responsibilities
and liabilities as if the income
were income received by or accruing to or in favour of him beneficially
It is clearly implicit therein that a representative assessee is not exempt from liability to pay advance tax
357 C of the liability to pay advance tax it is not predicated that the previous year should have come to
an end before the liability can anse
The previous year of an assessee may in some cases end after the commencement but before the end of a financial year in which advance tax is payable it may in other cases commence and end with the financial year
But the liability to pay advance tax is not in any manner 354 affected because the previous year ends before or with the financial year
There is nothing in the Act under which the liability to pay advance tax of a representative assessee depends upon determination of the total for the previous year
357 C G Accordingly it could not be held that the petitioner was not liable to pay advance tax on behalf of his non resident principal
358 E F ii The plea that the provisions imposing liability to pay advance tax upon an agent of a non resident infringe the equality clause of the Constitution could not be accepted
The only ground urged that an assessee may escape liability to pay advance tax when his previous year coincides with the financial year was without substance
359 B C