Liabilities of a representative assessee:
It is essential that a person who is sought to be assessed as the agent of the non-resident must be given an opportunity of being heard before the assessing officer treats him as the agent and imposes on him the vicarious liability to income-tax on behalf of the non-resident.
In order to be assessed as the agent of a non-resident it is not essential that the agent, who is regarded as the representative assessee under section 160(1)(i), must be actually in receipt of or is entitled to receive the income of the non-resident.
The representative assessee is not liable to be assessed under section 161 in his own name in respect of that income but the assessment made on him must, for all purposes be deemed to have made upon him only in his representative capacity. The tax determined on assessment shall be levied upon and recovered from the representative assessee in the like manner and to the same extent as it would be leviable upon and recoverable from the nonresident for whom he is the representative assessee. It may so happen that a person who is in India may have business connections with different non-residents and may also be a trustee in a number of trusts besides being a director of a number of companies. In such cases, there can be a large number of assessments on the very person as the representative assessee of each one of the non-residents with whom he has business connections, (as the representative assessee of the trusts) of which he is a trustee and these assessments in the representative capacity shall be made over and above his own assessment to income-tax and wealth-tax as an individual. Even if the representative assessee so desires, the income assessable in his hands in his representative capacity cannot be added to determine his total income assessable under the Income-tax Act, 1961 in his individual capacity or in any other representative capacity.