COMMISSIONER OF INCOME TAX Vs. DAVID JOSEPH

JUDGEMENT

(1.) THE questions of law referred to us for our decision in these reference cases are the following :

(2.) THE above questions of law were referred to us at the instance of the Commissioner of Income-tax, Trivandrum. THE assessee in these cases is a trust. THE assessment years involved in these references are 1981-82 and 1982-83. While passing the assessment orders for the aforesaid years, the Income-tax Officer took the view that the beneficiaries under the trust and their shares were indeterminate and, therefore, the trust should be assessed directly. Being aggrieved by the aforesaid orders, the assessee filed appeals before the Appellate Assistant Commissioner, who while disposing of the appeals found that the question whether the beneficiaries are known and their shares determinate had been considered by the Tribunal in the wealth-tax appeal for the assessment year 1975-76 filed by the trust. THE Tribunal found that the shares of the beneficiaries are specific and certain and in that view of the matter the Tribunal directed the lower authorities to complete the assessment under Section 21(1) of the Wealth-tax Act. As a consequence, the Appellate Assistant Commissioner found that as far as income-tax is concerned there cannot be any assessment on the assessee itself at the maximum marginal rate. It was further found that the beneficiaries had already been assessed and, therefore, it was not open to the Income-tax Officer to assess again the trustees. Against the above order of the Appellate Assistant Commissioner, the Revenue came up in second appeal before the Tribunal. After evaluating the entire materials on record the Tribunal sustained the order of the Appellate Assistant Commissioner. It was in the above circumstance that the reference applications were filed before the Tribunal by the Revenue.

(3.) LEARNED standing counsel for the Revenue, however, contended, relying on the decision of the Supreme Court in ITO v. Ch. Atchaiah [1996] 218 ITR 239, that the Income-tax Officer has no option either to assess an association of persons or its members individually under the present Act, though such option was available under the 1922 Act. Therefore, "he can, and he must, tax the right person and the right person alone. By 'right person' is meant the person who is liable to be taxed, according to law, with respect to a particular income". What standing counsel, therefore, pleads is that the Income-tax Officer in this case shall be directed to assess the "right person" inasmuch as there was no option available to him. It is difficult for us to countenance this argument because in the present case though the Officer has assessed the trust as an association of persons the Appellate Assistant Commissioner as well as the Tribunal found that the beneficiaries of the trust had already been assessed. When a "right person" has already been assessed, there is no question of directing the Income-tax Officer to assess the right person over again. Further, this point was never argued before the Appellate Assistant Commissioner or before the Tribunal. For the first time such a point is argued before us and we do not see any substance in the argument in view of the concurrent finding of the authorities below that the beneficiaries of the trust had already been assessed. Such assessment cannot be said to be on a "wrong person", under any circumstances.