ASSESSEE: MEANING

Assessee [Section 2(7)]

'Assessee' means a person by whom any tax or other sum of money is payable

under this Act, and includes:

(i) Every person in respect of whom any proceedings under this Act has been taken

for the assessment of his income or (ii) of the income of any other person in

respect of which he is assessable or (iii) of the loss sustained by him or by such

other person, or (iv) of the amount of refund due to him or to such other person;

Every person who is deemed to be an assessee under any provision of this Act.

Every person who is deemed to be an assessee in default under any provision of

this Act.

In common parlance every tax payer is an assessee. However, the word assessee

has been defined in Section 2(7) of the Act according to which assessee means a

person by whom any tax or any other sum of money (i.e. interest, penalty etc.) is

payable under the Act

The expression “other sum of money” includes

— fine, interest, penalty and tax or

— person to whom any refund of tax etc. is due under the Act or

— if any proceeding under the Act has been taken against any person, he is also an

assessee. Remember the proceedings must be initiated under the provisions of the

Act. In other words, a single enquiry letter issued by the Income-tax Department

without reference to any specific provision of the Act does not constitute proceeding

under the Act and, as such, till proceedings are initiated under the Act, the person

may not become an assessee within the ambit of Section 2(7) of the Act.

From the above definition, assesses are classified into three types:

(1) Ordinary Assessee:

Under this type, four categories are included:

Proceedings of the Act:

Any person against whom proceedings under the income tax Act are going on,

irrespective of any tax or any amount payable by the person.

A person who filed return of loss:

Any person who has made loss and filed return of loss under section 139 (3).

A person who has to pay amounts:

Any person who has to pay interest, tax or penalty under the income tax act.

A person who is entitled to refund:

Any person who is entitled to refund of tax under the income tax Act.

(2) Representative or deemed Assessee:

In certain cases, a person is liable not only for his own income or loss but also for

the income or loss of other persons. In such cases, he is treated as ‘deemed’ or

‘representative assessee’. The following are the situations:

In the case of deceased person: If a person dies after writing his will, the executors

of the property are deemed assesses.

In case of lunatic or minor or idiot: In case of these special individuals having

taxable income, their guardian is deemed assessee.

Non-residents: In case of non-residents having income in India, the person acting

on his/her behalf is deemed as assessee.

(3) Assessee-in-default:

If a person fails to fulfil his statutory obligation as per the income tax act he is

called “Assessee in default’:

Employers:

An employer paying salary has to deduct tax and remit it to the Government

Treasury. If he fails to deduct or does not remit it to the treasury he is called

assessee in default.

A person paying interest:

A person paying interest is under statutory obligation to deduct tax at

source. If he does not deduct or does not remit it to the treasury, he is treated as

assessee in default.

PERSON [SECTION 2(31)] :

Income-tax is charged in respect of the total income of the previous year of

every person. Hence, it is important to know the definition of the word person. As

per section 2(31), 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

every artificial, juridical person, not falling within any of the above categories

An individual a natural human being. i.e. male, female, minor or a person of sound or

unsound mind.

A Hindu undivided family : it consists of all persons lineally descended from a

common ancestor and includes their wives and unmarried daughters.

A company :Section 2(17) defines the term ‘company’ to mean:

(i) any Indian company, or

(ii) any body corporate incorporated by or under the laws of a country outside

India i.e. a foreign company, or

(iii) any institution, association or body which is or was assessable or was

assessed as a company for any assessment year under the Indian Income

Tax Act, 1922 or which is or was assessable or was assessed under this Act

as a company for any assessment year commencing on or before the 1 st

day of April, 1970, or

(iv) any institution association or body, whether incorporated or not and

whether Indian or non-Indian, which is declared by general or special order

of the Board to be a company only for such assessment year or assessment

years (whether commencing before the first day of April 1971 or, on or

after that date), as may be specified in the declaration.

Section 2(17) defines the term ‘company’ to mean:

(i) any Indian company, or

(ii) any body corporate incorporated by or under the laws of a country outside

India i.e. a foreign company, or

(iii) any institution, association or body which is or was assessable or was

assessed as a company for any assessment year under the Indian Income

Tax Act, 1922 or which is or was assessable or was assessed under this Act

as a company for any assessment year commencing on or before the 1st

day of April, 1970, or

(iv) any institution, association or body, whether incorporated or not and

whether Indian or non-Indian, which is declared by general or special order

of the Board to be a company only for such assessment year or assessment

years (whether commencing before the first day of April, 1971 or, on or

after that date), as may be specified in the declaration.

A FIRM

A partnership firm whether registered or not. An association of persons or a

body of individuals whether incorporated or not .The difference between Association

of persons and body of individuals is that whereas an association implies a voluntary

getting together for a definite purpose, a body of individuals would be just a body

without an intention to get-together. Moreover, the members of body of individuals

can be individuals only whereas the members of an association of persons can be

individual or non-individuals (i.e. artificial persons).

A LOCAL AUTHORITY

Means a municipal committee, district board, body of port commissioners, or

other authority legally entitled to or entrusted by the Government with the control

and management of a Municipal or local fund.

Every artificial, juridical person, not falling within any of the above categories:

This is a residuary clause. If the assessee does not fall in any of the first six

categories, he is assessed under this clause. Generally, a statutory corporation, deity

or charitable institution or an endowment for charitable or religious purposes falls

under artificial juridical person.

ASSESSMENT YEAR [SECTION 2(9)]

‘Assessment year means the period of twelve months commencing on 1st April every

year and ending on 31st March of the next year. Income of previous year of an

assessee is taxed during the following assessment year at the rates prescribed by the

relevant Finance Act.

PREVIOUS YEAR (SECTION 3)

Income earned in a year is taxable in the next year. The year in which income is

earned is known as previous year. From the assessment year 1989-90 onwards, all

assessees are required to follow financial year (i.e. April 1 to March 31) as previous

year. The uniform previous year has to be followed for all sources of income.

In case of newly set up business or profession or a source of income newly coming

into existence, the first previous year will be the period commencing from the date

of setting up of business/profession or as the case may be, the date on which the

source of income newly comes into existence and ending on the immediately

following March, 31.

Examples of previous year in the case of newly set-up business/profession:

Example I

Y sets up a new business on May 15, 2012. What is the previous year for the

assessment year 2013-14.

Ans. Previous year for the assessment year 2013-14 is the period commencing on

May 15, 2012 and ending on March 31. 2013.

Example 2

A joins an Indian company on February 17, 2012. Prior to joining this Indian

company he was not in employment nor does he have any other source of income.

Determine the previous year of A for the assessment years 2012- 13 and 201 3-14.

Ans. Previous years for the assessment years 2012-13 and 2013-14 will be as

follows:

Previous year Assessment year Feb. 17, 2012 to March 31, 2012 2012-13

April 1, 2012 to March 31, 2013 2013-14

BIBLIOGRAPHY

Dr. V. K. Singhania, Students Guide to Income-tax including Service Tax; Taxmann

Publications Pvt. Ltd.

Girish Ahuja, Systematic Approach to Income-tax, Service Tax and VAT; Bharat Law

Ravi Gupta House.

B. B. Lal and N. Vashist, Direct Taxes, Income Tax, Wealth Tax and Tax Planning;

Darling Kindersley (India) Pvt. Ltd.

Dr. H. C. Mehrotra, Direct Taxes (with Tax Planning); Sahitya Bhawan, Agra.

Ginsh Ahuja, Professional Approach to Direct Taxes Law & Practice; Bharat

Publications.

REFERENCES

Bare Act Income Tax Act, 1961 & Income Tax Rules, 1962

Sampath Iyengers, Law of Income Tax 11th Edition, Bharat Law House Pvt. Ltd.

A PROJECT REPORT OF

TAX LAW

ON

ASSESSEE

Submitted by:

Maninder Singh

Roll No.- 165/09

ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my teacher Prof.

SUPREET SIDHU who gave me the golden opportunity to do this wonderful project on

the Topic ASSESSEE, PREVIOUS YEAR AND ASSESSMENT YEAR, which also helped me

in doing a lot of Research and I came to know about so many new things. I am really

thankful to them. Secondly I would also like to thank my parents and friends who

helped me a lot in finishing this project within the limited time.

I am making this project not only for good marks but to also increase my

knowledge. Thank you all.

TABLE OF CONTENTS

S.NO. TITLE PAGE

1 ACKNOWLEDGE 1

2 ASSESSEE: MEANING 2

3 DEFINITION OF PERSON 5

4 BIBLIOGRAPHY 9