Question 1 (b)

Assessee and person distinguished (as set, 1961 Act, AY 2018-19)

3 marks

Time to write: About 6 minutes

From an older CBCS paper

Question

Question 1 (b) · 3 marks

Differentiate between assessee and person. 3

Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2018-19 (previous year 2017-18), with the dates as printed.

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

6 minfor 3 marks

Read from the question

Differentiate betweenSet the differences out in a table, basis by basis, not as two separate essays.

Write it in this order

1 Meaning of person (section 2(31)) 1 mark 1 min
2 Meaning of assessee, with its three inclusions (section 2(7)) 1½ marks 4 min
3 Points of difference, with an example ½ mark 1 min

123

Easy marks

Meaning of person (section 2(31)) (step 1, 1 mark): a definition in one or two lines. It opens the answer, so it takes a minute or two.

Short on time? Step 2 carries 1½ of the 3 marks: guard its minutes.

Try it first. About 6 minutes for 3 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Person

Person is the wider, inclusive term: the charge of tax in section 4 falls on persons, and section 2(31) says who they are. It includes seven classes: an individual; a Hindu undivided family; a company; a firm; an association of persons or a body of individuals, incorporated or not; a local authority; and every artificial juridical person not covered by the earlier classes (section 2(31)(i)-(vii)). Being a person says only that one is capable of being taxed.

Assessee

An assessee is a person by whom any tax or other sum of money is payable under the Act (section 2(7)). The definition also takes in:

every person in respect of whom any proceeding under the Act has been taken to assess his income or his fringe benefits, the income of another person for which he is assessable, the loss sustained by him or by that other person, or the refund due to him or to that other person (section 2(7)(a));
anyone whom a provision of the Act treats as an assessee, such as the legal heir of a deceased person or the agent of a non-resident (section 2(7)(b));
anyone treated as an assessee in default, such as an employer who fails to deduct or pay tax at source (section 2(7)(c)).

The difference

Point	Person	Assessee
Nature	Who may be taxed	Who is liable, or is being proceeded against
Basis	Status alone (section 2(31))	Any one of four routes: a sum payable under the Act; an assessment proceeding (income, fringe benefits, another's income, loss or refund); being deemed an assessee; or being deemed an assessee in default (section 2(7))
Scope	Wider: every assessee is a person	Narrower: a person becomes an assessee only through one of those routes
Liability for others	Not part of the definition, which turns on status alone	Yes: a person assessed for another's income, a deemed assessee and an assessee in default are all assessees, and each of them is also a person

Example

A student with no income is a person but not an assessee, provided no tax or other sum is payable by him under the Act, no proceeding has been taken against him for his own or anyone else's income, loss or refund, and no provision treats him as an assessee or as an assessee in default. Once tax becomes payable by him, or a proceeding is taken under the Act to assess his income, his loss or a refund due to him, he becomes an assessee. An employer who did not deduct tax from his staff's salaries is an assessee in default even for tax that is not on his own income.

Where the 3 marks sit

#	Component	Marks
1	Meaning of person (section 2(31))	1
2	Meaning of assessee, with its three inclusions (section 2(7))	1.5
3	Points of difference, with an example	0.5
	Total	3

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