Meaning of ‘representative assessee’ :

Section 160(1)(i) defines the expression “representative assessee‟ for all purposes of assessment to income -tax to mean the agent of a non-resident in respect of the income of the non-resident which is deemed to accrue or arise to him in India under section 9(1) of the Income-tax Act, 1961. The expression “agent‟, in this context, must also be taken to include a person who is treated or deemed to be an agent by the Assessing Officer for the purposes of making assessment on him under section 163 of the Income-tax Act, 1961.

The term “assessee‟ under section 2(7) include a representative assessee within its scope. The Assessing Officer is statutorily empowered to issue notice under section 163 to any person to deem him as the agent of the non-resident foreign collaborator. The term „agent‟ should, for this purpose, be taken to include:

(i) any person in India who is employed by or on behalf of the non-resident; or

(ii) any person in India who has any business connection with the non-resident within the meaning of Explanation 2 to section 9(1)(i); or

(iii) any person in India from or though whom the non-resident is in receipt of any income, whether directly or indirectly; or

(iv) any person in India who is the trustee of the non-resident; or

(v) any person in India who, whether resident or non-resident, has acquired by means of a transfer, a capital asset in India.

However, a broker in India who in respect of any transaction does not deal directly with or on behalf of a non-resident principal but deals with or through a non-resident broker should not be deemed to be an agent under section 163(1) in respect of the income attributable to those transactions provided both the following conditions are fulfilled:

(a) the transactions must be carried on in the ordinary course of business through the first mentioned broker; and

(b) the non-resident broker must be one who carries on such transactions in the ordinary course of his business and not as a principal.