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.

Example:

Determine the status of the following :

• Delhi University
• Microsoft Ltd.
• Delhi Municipal Corporation
• Swayam Education Pvt. Ltd.
• Axsis Bank Limited.
• ABC Group Housing Co-operative Society.
• DC & Co., firm of Mr. Dust and Mr. Clean
• A joint family of Mr.Dirty, Mrs. Dirty and their sons Mr. Dust and Mr. Clean
• X and Y who are legal heirs of Z ( Z died in 1995 and X and Y carry on his business without entering into partnership).

Solutions :

1. Artificial Judicial Person
2. A Company
3. A local authority
4. A company
5. An association of person
6. firm ;
7. A Hindu Undivided Family
8. An association of persons.

‘Assessee’ means a Person by whom any Tax or any other sum of money is payable under this Act. And this is divided into 3 categories.

• Ordinary Assessee : It includes …
• Any person against whom some proceedings under this Act are going on. It is immaterial whether any Tax or other amount is payable by him or not ;
• Any person who has sustained loss and has filed return of Loss u/s 139(3).
• Any person by whom some amount of Interest , Tax or Penalty is payable under this Act ; or
• Any person who entitled to refund of Tax under this Act.
• Representative Assessee or Deemed Assessee :

A person may not be liable only for his own income or loss but also on the income or loss of other persons e.g. Guardian of Minor or Lunatic, Agent of a Non-Resident etc. in such case the persons responsible for the assessment of Income of such persons are called Representative Assessee. Such person is Deemed to be an Assessee.

• Assessee-in-default :

A person is deemed to be an assessee-in-default if he fails to fulfill his statutory obligations. In case of an employer paying Salary or a person who is paying interest it is their duty to deduct tax at source and deposit the amount of tax so collected in Government treasury. If he fails to deduct tax at source or deducts tax but does not deposit it in the treasury, he is known as Assessee-in-default.

Example :

• Income of Mr. You ( age : 30 years) is Rs. 1,45,000 for the assessment year 2009-10. he does not file his return of income because his income is not more than the amount of exempted slab. Income-Tax Department does not take any action against him. He is not an “assessee” because no tax or any other sum is due from him.
• Income of Mr. Me ( age: 35 years) is Rs.1,60,000 for the assessment year 2009-10. He does not file his return of income. Since he is supposed to file his return of income ( income being more than exempted slab of Rs.1,50,000) . he is an “Assessee”.
• Income of Mr. S ( age : 50 years) is Rs. 70,000 for the assessment year 2009-10. He files his return of income ( even if his taxable income is less than Rs.1,50,000 ). Assessment order is passed by the Assessing Office without any adjustment. Mr.S is an “ Assessee”.
• Income of Mr. Ram ( age : 25 years) is less than Rs.1,50,000 for the assessment year 2009-10. He files his return of income to claim Refund of Tax deducted by XYZ Ltd. on interest paid to him. B is an “Assessee”.
• Income of MR. Clean ( age : 30 years) is less than Rs.1,50,000 for the assessment year 1009-10. He does not file his return of income. During 2008-09 , he has paid salary of Rs.2,40,000 to an employee. Though he is supposed to deduct TDS (Tax deducted at Source ), yet due to ignorance of law, no tax deducted by him. In this case, Mr. Clean is an “assessee” as he has failed to deduct tax at source. This rule is applicable even if his own taxable income is below Rs.1,50,000.