Income Tax Assessee under the Income Tax act

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Income Tax Assessee under the Income Tax Act
The income tax law has assigned a special term for persons whose income is assessed under the income tax act. Such persons are known as ‘assessees’ under the income tax act. Section 2(7) of the Income Tax Act, 1961 defines the income tax assesses in an explicit manner.
As per Section 2(7), any person by whom any sum is payable under the income tax act is known as the ‘assessee’. Before proceeding with the detailed discussion on the assessee, it is important to know what the person means under the income tax act.
As per Section 2(31) of the Income Tax Act, 1961, ‘person’ includes: 

  • an individual,
  • a Hindu undivided family,
  • a company,
  • a firm,
  • an association of persons or a body of individuals, whether incorporated or not,
  • a local authority, and
  • every artificial juridical person, not falling within any of the preceding sub-clauses

Also, an association of persons (AOP) or a body of individuals (BOI) or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains.
Thus, ‘person’ has been given a very wide meaning to include most of the constitution formats in which you can operate. This directly widens the definition of the assessee.
Types of Assessees in Income Tax
A person is not always considered an assessee. Apart from persons who are liable to pay any sums under the income tax act, Section 2(7) also covers the following persons as the income tax assessee:
Persons Proceeded Under the Act (Normal Assessees): This includes any person in respect of whom any proceeding has been undertaken for the following purposes:

  • for assessment of his income under this act
  • for assessment of his fringe benefits 
  • for assessment of income of any other person in respect of whom he is assessable i.e., representative assessees
  • for loss sustained by him or any other person in respect of whom he is assessable
  • for the amount of refund due to him or such other person in respect of whom he is assessable

Deemed Assessees: This includes those persons who are deemed to be the assessees under the provisions of the income tax act. These are the assessees upon whom the responsibility to pay taxes and fulfill statutory obligations has been conferred by the income tax law.
Assessees in Default: This includes those persons who are deemed to be the assessees in default under the provisions of the income tax act. Assessees in default primarily include those assessees who have failed to comply with the provisions and rules of the income tax act. The income tax law has put in place various instances whereby the assessee shall be deemed as assessee in default. Such assessees shall be liable to penal action as per the provisions of the income tax law. 
Who Are Representative Assessees?
In simple terms, representative assessee means a person who represents another person or his income. As per Section 160 of the Income Tax Act, 1961, the following shall be considered as the representative assessees in the below mentioned cases:

Cases

Who shall be the Representative Assessee?

In respect of the income of a non-resident specified in Section 9(1)

The agent of the non-resident, including a person who is treated as an agent under Section 163

In respect of the income of a minor, idiot or lunatic

The manager or the guardian who is in receipt or is entitled to receive such income on behalf of such minor, idiot or lunatic

In respect of income which the Court of Wards, the Administrator- General, the Official Trustee or any receiver or manager appointed by or under any order of a court, receives or is entitled to receive, on behalf or for the benefit of any person. It includes any person, whatever his designation, who in fact manages the property on behalf of another.

Such Court of Wards, Administrator-General, Official Trustee, receiver or manager

In respect of income which a trustee receives or is entitled to receive on behalf or for the benefit of any person where such trustee is appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise including any wakf deed which is valid under the Mussalman Wakf Validating Act, 1913 (6 of 1913).

Such trustee or trustees

In respect of income which a trustee receives or is entitled to receive on behalf or for the benefit of any person where such trustee is appointed under an oral trust 

Such trustee or trustees

 

The above were the types of assessees under the income tax act. Do you get covered any of the above provisions?
 


Author : Dipen

Date     : 12-Jul-2022


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