PERSON And Assessee

PERSON [ Section 2(31) ] The word “Person” is a very wide term and embraces in itself the following : Individual: It refers to a natural human being whether male or Female, Minor or Major. Hindu Undivided Family (HUF) : It is a relationship created due to operation of Hindu Law. The Manager of HUF is called “Karta” and its member are called ‘Coparceners’. Company: It is an artificial person registered under Indian Companies Act 1956 or any other Law. Firm: It is an entity which comes into existence as a result of partnership agreement. The Income Tax accepts only these entities as Firms which are accessed as Firms under Section 184 of the Act. Association of Persons (AOP) or Body of Individuals (BOI) : Co-operative societies, MARKFED, NAFED, etc are the example of such persons. When persons combine together to carry on a joint enterprise and they do not constitute partnership under the ambit of law, they are assessable as an Association of Persons. An A.O.P. can have firms, companies, associations and individuals as its members. A Body of Individual ( B.O.I.) cannot have non-individuals as its members. Only natural human being can be members of a Body of Individuals  Local Authority : Municipality, Panchayat, Cantonment Board, Port Trust etc. are called Local Authority. Artificial Judicial Person : Statutory Corporations like Life Insurance Corporation, a University etc. are called Artificial Judicial Persons. These are seven categories of person chargeable to tax under the Act. The aforesaid definition is inclusive and not exhaustive. Therefore, any person, not falling in the above-mentioned seven categories, may still fall in the four corners of the term “Person” and accordingly may be liable to tax under Sec.4.

Assessee  means a person by whom any tax or any other sum of money is payable under this Act and includes the following:

(i) Every person in respect of whom any proceeding under the Income-tax Act has been taken: for the assessment of his income or the income of any other person in respect of which he is assessable; or to determine the loss sustained by him or by such other person; or to determine the amount of refund due to him or to such other person. (ii) A person who is deemed to be an assessee under any provisions of this Act i.e. a person who is treated as an assessee. This would include the legal representative of a deceased person or the legal guardian of minor if minor is taxable separately. (iii) Every person who is deemed to be an assessee in default under any provisions of this Act. A person is said to be an assessee in default if he fails to comply with the duties imposed upon him under the Income-tax Act. For example: a person, paying interest to another person, is responsible for deducting tax at source on this amount and to deposit the tax with the Government. If he fails in either of these duties i.e., if he does not deduct the tax, or deducts the tax but does not deposit it with the Government, he shall be deemed to be an assessee in default. Every assessee is a 'person', but every person need not be an 'assessee'. For example, X, an individual has earned total income of Rs. 2,40,000 in the previous year. He is a person but not an assessee because his total income is less than the maximum exemption limit of Rs. 2,50,000 and no tax or any other sum is due from him. A person may not have his own assessable income but may still be an assessee. For example, an assessee, who has earned an income of Rs. 1,45,000 in a previous year, fails to deduct the tax at source on salary paid by him, which he was required to do under the Act, shall be deemed to be an assessee in default. Although, he is not assessable in respect of his own income, as it is below the maximum exemption limit, but shall still be an assessee for not deducting the tax at source, which he was obliged to do.

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