Income Tax Act, 1961
Section 163. WHO MAY BE REGARDED AS AGENT.
(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.
(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.