Delhi High Court
H.C.L. Ltd vs Commissioner Of Income Tax on 24 July, 1992
Equivalent citations: [1993]199ITR291(DELHI)
JUDGMENT
1. The petitioner filed a return of income for the assessment year 1989-90 on August 25, 1989, through an authorised representative. However, the petitioner appended a note stating that the return claiming that the payments made to foreign buyers do not attract the provisions of the Income-tax Act, 1961. In the premises, payments made to foreign collaborators on account of lump sum consideration for technical know how are neither royalty nor even for technical services under the provisions section 9 and section 9. The Income-tax Officer was not satisfied and was of the opinion that lump sum consideration paid to the foreign collaborators for technical services were chargeable to income-tax. The amount paid for technical know-how was to the tune of Rs. 36,69,883. For the aforesaid reasons, the Income-tax Officer came to the conclusion that it is a fit case for issue of notice under section 148 of the Act.
2. This issue of notice has been challenged in this writ petition.
3. One of the main grounds in this writ petition was that there was no reason given in the notice for initiation of the proceedings under section 148 of the Income-tax Officer Act, 1961. In the return, the order passed by the Income-tax Officer has been reproduced which clearly goes to show that he had recorded reasons for issuance of the notice which are sufficient to clothe him with jurisdiction to proceed with the matter under section 148 of the Act.
4. It was then argued that before notice under section 148 of the Act could be issued, a notice had to be issued to the petitioner under section 163 of the Act because under that provision, no person shall be treated as an agent of a non-resident unless he had an opportunity of being heard by the Assessing Officer as to his liability to be treated as such. This point does not arise in this case because the petitioner's own case in the return filed with the Income-tax Department is that the amount paid by them to the foreign collaborator on account of lump sum consideration for technical know-how was not liable to tax under the Act. Moreover, the return is also filed in the capacity of a representative assessed with the appended note referred to above. In the circumstances, this point does not arise. All the same, we leave it open to the petitioner to raise this point in reply to the notice under section 148 of the Act.
5. Accordingly, we allow the petitioner to file a reply to the show-cause notice under section 148 of the Act and dismiss this writ petition.