Section 163 of Income Tax Act "Who may be regarded as agent"
163. (1) For the purposes of this Act, "agent", in
relation to a non-resident, includes any person in India-
(a) who is employed by or on behalf of the non-resident; or
(b) who has any business connection with the non-resident;
or
(c) from or through whom the non-resident is in receipt of
any income, whether directly or indirectly; or
(d) who is the trustee of the non-resident;
and includes also any other person who, whether a resident
or non-resident, has acquired by means of a transfer, a
capital asset in India :
Provided that a broker in India who, in respect of any
transactions, does not deal directly with or on behalf of a
non-resident principal but deals with or through a
non-resident broker shall not be deemed to be an agent under
this section in respect of such transactions, if the
following conditions are fulfilled, namely:-
(i) the transactions are carried on in the ordinary course
of business through the first-mentioned broker; and
(ii) the non-resident broker is carrying on such
transactions in the ordinary course of his business and not
as a principal.
Explanation.-For the purposes of this sub-section, the
expression "business connection" shall have the meaning
assigned to it in Explanation 2 to clause (i) of sub-section
(1) of section 9 of this Act.
(2) No person shall be treated as the agent of a
non-resident unless he has had an opportunity of being heard
by the Assessing Officer as to his liability to be treated
as such.
164. (1) Subject to the provisions of sub-sections (2)
and (3), where any income in respect of which the persons
mentioned in clauses (iii) and (iv) of sub-section (1) of
section 160 are liable as representative assessees or any
part thereof is not specifically receivable on behalf or for
the benefit of any one person or where the individual shares
of the persons on whose behalf or for whose benefit such
income or such part thereof is receivable are indeterminate
or unknown (such income, such part of the income and such
persons being hereafter in this section referred to as
"relevant income", "part of relevant income" and
"beneficiaries", respectively), tax shall be charged on the
relevant income or part of relevant income at the maximum
marginal rate :
Provided that in a case where-
(i) none of the beneficiaries has any other income
chargeable under this Act exceeding the maximum amount not
chargeable to tax in the case of an association of persons
or is a beneficiary under any other trust; or
(ii) the relevant income or part of relevant income is
receivable under a trust declared by any person by will and
such trust is the only trust so declared by him; or
(iii) the relevant income or part of relevant income is
receivable under a trust created before the 1st day of
March, 1970, by a non-testamentary instrument and the
Assessing Officer is satisfied, having regard to all the
circumstances existing at the relevant time, that the trust
was created bona fide exclusively for the benefit of the
relatives of the settlor, or where the settlor is a Hindu
undivided family, exclusively for the benefit of the members
of such family, in circumstances where such relatives or
members were mainly dependent on the settlor for their
support and maintenance; or
(iv) the relevant income is receivable by the trustees on
behalf of a provident fund, superannuation fund, gratuity
fund, pension fund or any other fund created bona fide by a
person carrying on a business or profession exclusively for
the benefit of persons employed in such business or
profession,
tax shall be charged on the relevant income or part of
relevant income as if it were the total income of an
association of persons :
Provided further that where any income in respect of which
the person mentioned in clause (iv) of sub-section (1) of
section 160 is liable as representative assessee consists
of, or includes, profits and gains of business, the
preceding proviso shall apply only if such profits and gains
are receivable under a trust declared by any person by will
exclusively for the benefit of any relative dependent on him
for support and maintenance, and such trust is the only
trust so declared by him.
(2) In the case of relevant income which is derived from
property held under trust wholly for charitable or religious
purposes, or which is of the nature referred to in
sub-clause (iia) of clause (24) of section 2, or which is of
the nature referred to in sub-section (4A) of section 11,
tax shall be charged on so much of the relevant income as is
not exempt under section 11 or section 12, as if the
relevant income not so exempt were the income of an
association of persons :
Provided that in a case where the whole or any part of the
relevant income is not exempt under section 11 or section 12
by virtue of the provisions contained in clause (c) or
clause (d) of sub-section (1) of section 13, tax shall be
charged on the relevant income or part of relevant income at
the maximum marginal rate.
(3) In a case where the relevant income is derived from
property held under trust in part only for charitable or
religious purposes or is of the nature referred to in
sub-clause (iia) of clause (24) of section 2 or is of the
nature referred to in sub-section (4A) of section 11, and
either the relevant income applicable to purposes other than
charitable or religious purposes (or any part thereof) is
not specifically receivable on behalf or for the benefit of
any one person or the individual shares of the beneficiaries
in the income so applicable are indeterminate or unknown,
the tax chargeable on the relevant income shall be the
aggregate of-
(a) the tax which would be chargeable on that part of the
relevant income which is applicable to charitable or
religious purposes (as reduced by the income, if any, which
is exempt under section 11) as if such part (or such part as
so reduced) were the total income of an association of
persons; and
(b) the tax on that part of the relevant income which is
applicable to purposes other than charitable or religious
purposes, and which is either not specifically receivable on
behalf or for the benefit of any one person or in respect of
which the shares of the beneficiaries are indeterminate or
unknown, at the maximum marginal rate :
Provided that in a case where-
(i) none of the beneficiaries in respect of the part of the
relevant income which is not applicable to charitable or
religious purposes has any other income chargeable under
this Act exceeding the maximum amount not chargeable to tax
in the case of an association of persons or is a beneficiary
under any other trust; or
(ii) the relevant income is receivable under a trust
declared by any person by will and such trust is the only
trust so declared by him; or
(iii) the relevant income is receivable under a trust
created before the 1st day of March, 1970, by a
non-testamentary instrument and the Assessing Officer is
satisfied, having regard to all the circumstances existing
at the relevant time, that the trust, to the extent it is
not for charitable or religious purposes, was created bona
fide exclusively for the benefit of the relatives of the
settlor, or where the settlor is a Hindu undivided family,
exclusively for the benefit of the members of such family,
in circumstances where such relatives or members were mainly
dependent on the settlor for their support and maintenance,
tax shall be charged on the relevant income as if the
relevant income (as reduced by the income, if any, which is
exempt under section 11) were the total income of an
association of persons :
Provided further that where the relevant income consists of,
or includes, profits and gains of business, the preceding
proviso shall apply only if the income is receivable under a
trust declared by any person by will exclusively for the
benefit of any relative dependent on him for support and
maintenance, and such trust is the only trust so declared by
him :
Provided also that in a case where the whole or any part of
the relevant income is not exempt under section 11 or
section 12 by virtue of the provisions contained in clause
(c) or clause (d) of sub-section (1) of section 13, tax
shall be charged on the relevant income or part of relevant
income at the maximum marginal rate.
Explanation1.-For the purposes of this section,-
(i) any income in respect of which the persons mentioned in
clause (iii) and clause (iv) of sub-section (1) of section
160 are liable as representative assessee or any part
thereof shall be deemed as being not specifically receivable
on behalf or for the benefit of any one person unless the
person on whose behalf or for whose benefit such income or
such part thereof is receivable during the previous year is
expressly stated in the order of the court or the instrument
of trust or wakf deed, as the case may be, and is
identifiable as such on the date of such order, instrument
or deed ;
(ii) the individual shares of the persons on whose behalf or
for whose benefit such income or such part thereof is
received shall be deemed to be indeterminate or unknown
unless the individual shares of the persons on whose behalf
or for whose benefit such income or such part thereof is
receivable, are expressly stated in the order of the court
or the instrument of trust or wakf deed, as the case may be,
and are ascertainable as such on the date of such order,
instrument or deed.
Explanation 2.- [Omitted by the Direct Tax Laws (Amendment)
Act, 1987, w.e.f. 1-4-1989.]