This appeal by assessee is directed against order dated 12-6-1981, passed by Commissioner (Appeals). 2. On 14-11-1968, assessee-company had entered into agreement with non-resident company, viz., Zimmers A.G., West Germany, for erection of machinery for their tyre cord plant. It was provided in said agreement that payments to be made by assessee to said non-resident company would be free of taxes in India. 3. On 23-5-1972 assessee addressed letter to ITO, in which assessee drew attention to agreement mentioned above and sought information as to what amount should be deducted at source under section 195 of Income-tax Act, 1961 ('the Act') while making payments to non- resident company under said agreement. This letter was sent under section 195(2). Another letter dated 30-6-1972, making same prayer was addressed to ITO. latter sought certain information by letter dated 9-7-1973. After receipt of information, ITO by letter dated 9-10-1975, informed that assessee was liable to pay Rs. 22,21,065 under section (sic) of Act, in respect of gross taxable amount of Rs. 30,95,561 and after taking note of fact that sum of Rs. 15 lakhs had already been paid by assessee on 30- 9-1975, he directed assessee to pay balance of Rs. 7,21,065 immediately. He also drew attention of assessee to fact that above mentioned payment was subject to payments of interest under section 201(1A) of Act and that under said provision interest would be payable at 12 per cent per annum on Rs. 22,21.065 from date on which tax was deductible to date on which tax was actually paid. 4. After this letter was received, assessee paid Rs. 7,21,065 on 18-10- 1975. Thereupon, by letter dated 23-12-1975, ITO directed assessee to pay Rs. 9,50,000 towards interest subject to adjustment on final determination of quantum of interest. By letter dated 12-10-1976, ITO informed assessee that tax deductible from payment made to non-resident company would come to Rs. 27,07,517 in all and after taking note of fact that Rs. 22,21,065 had already been paid, he directed assessee to pay balance of Rs. 4,86,452 and also to pay balance of interest. 5. assessee paid said balance of Rs. 4,86,452 on 30-10-1976 and ITO by letter dated 7-5-1977, directed assessee to pay balance of interest amounting to Rs. 3,88,095 under section 201(1A). Against this direction, assessee filed appeal before Commissioner (Appeals). 6. It is to be seen that it was case of assessee from very beginning that tax was deductible under section 195, in respect of payments made to non-resident company. direction that assessee wanted from ITO was regarding amounts that was deductible. ITO determined amounts payable from time to time under section 195 and assessee paid those amounts. However, those amounts were paid by assessee under section 195 long after he had remitted amounts to non-resident under agreement. Under section 195 assessee was required to deduct amount before making payments to non-resident. Since deduction was made long after payment to non-resident, assessee became liable to pay interest under section 201(1A). Out of liability of Rs. 13,38,095 towards payment of interest, assessee paid Rs. 9,50,000 and when balance of Rs. 3,88,095 remained to be paid, assessee filed appeal before Commissioner (Appeals). 7. Before Commissioner (Appeals), assessee raised two grounds in memo of appeal. first ground was that ITO should not have levied interest. second ground was that interest levied should have been considered by ITO as forming part of cost of plant and machinery, for purpose of depreciation, etc. second ground appears to have not been pressed and that ground does not survive as far as we are concerned. 8. At time of hearing of appeal before Commissioner (Appeals), assessee raised additional ground in following words: " ITO erred in treating assessee as 'assessee in default' for not deducting tax at source . . . ITO ought not to have treated assessee as 'an assessee in default', since assessee was liable to pay income-tax as agent for and on behalf of Zimmers A.G. under section 163(1)(c) of Act. " 9. Commissioner (Appeals) first dealt with additional ground raised in course of hearing of appeal before him. He observed that before ITO, assessee had proceeded throughout on basis that assessee had liability under section 195. assessee had never disclosed before ITO that assessee was agent of non-resident and was liable to pay tax in capacity of agent. assessee paid entire tax which was payable under section 195 and also major portion of interest under section 201(1A). It was not open to assessee to contend for first time by additional ground in appeal that assessee was agent and had no liability to deduct tax under section 195. He further observed that question whether assessee was agent was mixed question of fact and law and investigation into question of that nature could not be made at appellate stage. He, therefore, rejected additional ground. 10. As regards ground of merits, Commissioner (Appeals) observed that assessee had paid tax under section 195, long after he remitted amounts to non-resident and as such liability to pay interest under section 201(1A) was clearly attracted. There was no error in levy of interest under said provision. He, therefore, rejected said ground and dismissed appeal. 11. In this appeal, those two grounds have again been raised on behalf of t h e assessee. As regards first ground, contention is that one of conditions for attracting liability for deducting tax at source under section 195 in respect of payments made to non-resident is that assessee is not liable to pay income-tax thereon as agent of said non-resident. In present case, assessee came under category of agent or said non-resident company, in view of provisions of section 163(1)(c) of Act. Consequently, assessee had no liability to deduct tax at sources under section 195, with result that no interest under section 201(1A) was payable. Reference was invited to clause (4) of agreement under which assessee was required to make payments free of tax. 12. learned departmental representative relied on reasons given by Commissioner (Appeals). He further argued that since assessee had not been recognised as agent under section 163(2), it could not be deemed to be agent and as such there was no escape from liability under section 195. 13. We have considered rival submissions and facts on record. It cannot be disputed that first group of sections, viz., sections 160 to 163 of Act and second group of sections, viz., sections 195 to 201 of Act are mutually exclusive and operate on different fields. Consequently, same person cannot be treated as agent under section 163 and proceeded against under section 201 at same time. In this view of matter, person who is himself liable under section 161 read with section 163(1)(c) to pay income-tax on payments to be made to non-resident company as agent of said non- resident cannot be saddled with further obligation to deduct income-tax under section 195 before making payment to non-resident and be deemed to be in default under section 201. 14. However, as ordained by section 163(2), no person can be treated as agent of non-resident unless he had opportunity of being heard as to his liability for being treated as such, with result that until and unless one is appointed as statutory agent in this manner, one cannot be fastened with any liability whatsoever, including payment of advance tax because doing so will amount to giving retrospective effect to these provisions which are not warranted in absence of express provisions in that regard---CIT v. Belapur Sugar & Allied Industries Ltd. [1983] 141 ITR 404 (Bom.). Keeping in view of provision of section 163(2) regarding opportunity of being heard to be given to agent as also to provisions of sections 246(1)(g), 246(2)(a) and 246(2)(b) of Act regarding filing of appeal against order made under section 163 treating assessee as agent of non-resident, it is necessary that written order must be passed by taxing authorities for treating person to be agent of non-resident before any liability as agent could be fastened on said person. Besides, having regard to scheme of Act, assessment for each year is self contained and as such vicarious liability imposed by appointment under section 163(2) only extends to liability of assessment of year for which appointment is made and cannot extend to liability for any other assessment year. 15. In present case, it is admitted position that assessee has not been appointed as statutory agent under section 163(2) as far as non- resident in question is concerned. It was never claim of assessee before ITO that assessee was agent of non-resident. assessee never filed any estimate of advance tax or any return as agent of non- resident. assessee accepted throughout that its liability was under section 195, that is why assessee made applications under section 195(2) to ITO. In circumstances, it is not open to assessee to assert at this stage that assessee should be treated as agent of non-resident. Whether on facts of present case, assessee could be treated as agent of non-resident gives rise to mixed question of facts and law and for determination of that question, evidence would be required to be brought on record. question of this nature cannot be investigated at appellate stage when at initial stage it was never case of assessee that assessee was agent of non-resident. 16. Section 195(1) lays down that 'any person responsible for paying to non-resident ... any other sum . . . chargeable under provisions of this Act, shall, at time of payment, unless he is himself liable to pay any income-tax thereon as agent, deduct income-tax thereon at rates in force'. words 'unless he is himself liable to pay any income-tax thereon as agent' indicate that there should have been existing liability to pay income-tax as agent. assessee has never in past accepted its liability to pay income-tax as agent of said non-resident. assessee has never filed any return as agent. assessee has never paid any advance tax as agent. No liability as agent could be fastened on assessee unless opportunity of being heard was given under section 163(2). No order under section 163(2) has been passed in respect of assessee treating assessee as agent. In circumstances, it cannot be said in present case that assessee was liable to pay income-tax as agent of non-resident. Consequently, assessee cannot escape liability to deduct income-tax under section 195. 17. In this connection, decision in National Newsprint & Paper Mills Ltd. v. CIT [1961] 41 ITR 60 (MP) is very instructive. Madhya Pradesh High Court in that case was construing provisions of sections 18(3B) and 43 of Indian Income-tax Act, 1922 ('the 1922 Act') which correspond to sections 195 Indian Income-tax Act, 1922 ('the 1922 Act') which correspond to sections 195 and 163 of 1961 Act. High Court observed expression 'unless he is himself liable to pay any income-tax . . . thereon as agent' introduces in sub- section (3B) exception for benefit of person sought to be made liable for deduction under that sub-section. expression does not mean that unless person has been declared not to be agent in accordance with section 43, he cannot be made liable for deduction under sub-section (3B). If department has not treated him as agent, it must be taken that for purpose of sub- section (3B) of section 18, person has not been made liable to pay income- tax as agent of non-resident. No enquiry and adjudication is necessary for determining whether person has or has not been treated as agent under section 43 before making him liable under section 18(3B) for deduction of tax. above principle would apply in present case. As already stated, assessee has not been treated as agent. assessee itself had never claimed to be agent before ITO. In circumstances, assessee cannot claim that assessee is liable to pay income-tax as agent and that provisions of section 195 were not applicable. 18. We hold that provisions of section 195 were applicable and that assessee was liable to deduct tax at source. 19. It is admitted position that assessee did not deduct tax at source at time of remittance of amount to non-resident. There was time gap between date of remitting amount to non-resident and payment of tax under section 195. Consequently, provisions of section 201(1A) were attracted. Under those provisions, assessee was liable to pay simple interest at 12 per cent per annum on amount of tax from date on which such tax was deductible to date on which such tax was actually paid. Admittedly, interest has been calculated on basis given in this sub-section. Consequently, there is no error in levy of interest. 20. alternate submission on behalf of assessee was that assessee was liable to pay interest with effect from 12-10-1976 because it was on that date that assessee came to know about its liability on receiving communication from ITO under section 195(2). This contention cannot be accepted. Under scheme of section 195, any person responsible for paying to non-resident at very time of payment deduct income-tax thereon (sic). deduction of income-tax is, thus, to be made at time of payment to non-resident. That deduction cannot be postponed to any future date. Section 195(2) only enables person concerned to make application to ITO to determine by general or special order, appropriate proportion of sum chargeable to tax. said provisions expressly lays down that upon such determination tax shall be deducted under sub-section (1) on that proportion of sum which is so chargeable. Thus, as far as date on which deduction should be made is concerned, said date is date of payment to non-resident. If person concerned wanted to ascertain amount from ITO under section 195(2), it was his duty to postpone payment to non-resident till ITO determined amount under said provision. There is nothing to section 195(2) to indicate that person concerned would make payments to non-resident without deducting tax at source under sub- section (1). Consequently, date from which interest would be chargeable would be date on which tax was deductible and that date would be date on which amount was remitted to non-resident. alternate contention must, therefore, be rejected. 21. Reliance was placed on behalf of assessee on decision of Bombay High Court in CIT v. Premier Tyres Ltd. [1982] 134 ITR 17. ratio of that decision is that person who is liable to pay tax as agent of non- resident is not required to deduct tax under section 195 before making payment to non-resident and such person cannot be deemed to be in default under section 201. ratio of this decision is not applicable to facts of present case. In case before Bombay High Court, ITO under section 163(2) had passed order that assessee was agent of non-resident. Consequently, it was admitted position in that case that assessee was agent of non-resident. It was on this admitted position that High Court held that assessee was not liable to deduct tax under section 195. In our case, position is entirely different. In our case, there is no order under section 163(2) treating assessee as agent of non-resident. assessee itself never asserted before ITO at relevant time that assessee was agent of non-resident. assessee by its conduct represented to ITO that it was not agent and that it was liable to deduct tax under section 195. In circumstances, assessee was not entitled to assert subsequent stage that assessee was agent of non-resident. As already stated, said question was mixed question of law and fact and that question cannot be investigated at appellate stage. 22. It may be mentioned here that it was expressly stated on behalf of assessee that assessee did not want refund of tax paid under section 195. It is only in respect of liability to pay interest that assessee wanted to raise above point. said point, in our opinion, cannot be raised in circumstances of present case. 23. For reasons given above, there is no ground to interfere in orders passed by lower authorities. appeal fails and is dismissed. *** NIRLON SYNTHETIC FIBRES & CHEMICALS LTD. v. INSPECTING ASSISTANT COMMISSIONER OF INCOME -TAX