The term assessee under the 1961 Act (as set, 1961 Act, AY 2019-20)

Meaning

Under section 2(7), an assessee is anyone who is liable to pay tax, or some other sum of money, under the Act. The definition is inclusive: besides the person who owes tax, it takes in persons against whom proceedings are taken and persons whom the Act treats as assessees. A person who owes no tax for a year can therefore still be an assessee, for example when a loss of his is being assessed or a refund due to him is being worked out. A person for this purpose is any of the persons listed in section 2(31): an individual, a Hindu undivided family, a company, a firm, an association of persons or body of individuals, a local authority and any other artificial juridical person.

The four kinds of assessee

1. Ordinary assessee: the person who is himself liable to pay tax, interest, penalty or any other sum under the Act on his own income.
2. Person in respect of whom a proceeding is taken (section 2(7)(a)): every person against whom a proceeding has been started to assess his own income, the income of another person for which he is assessable, a loss suffered by himself or by that other person, or a refund due to himself or to that other person.
3. Deemed assessee (section 2(7)(b)): a person the Act deems to be an assessee. The legal representative of a person who has died is deemed an assessee for the dead person's income (section 159(3)); a representative assessee, such as the guardian of a minor or the agent of a non-resident, is deemed an assessee for the income he represents (section 160(2)).
4. Assessee in default (section 2(7)(c)): a person deemed to be in default under the Act. An employer or other payer who fails to deduct tax at source, or deducts it but does not pay it to the Government, is deemed an assessee in default for that tax (section 201(1)). The first proviso to section 201(1) gives relief where the tax was not deducted on a sum paid or credited to a resident: the payer is not an assessee in default if the resident has furnished his return under section 139, has taken that sum into account in it and has paid the tax due on the income declared, and the payer furnishes an accountant's certificate to that effect. An assessee who does not pay the tax demanded in a notice of demand within the time allowed is also an assessee in default (section 220(4)).

Example (our own)

Ravi, a salaried employee, files his return and pays his tax: an ordinary assessee. After his death his daughter is asked to file his last return: she is a deemed assessee as his legal representative. If Ravi's employer had failed to deposit the tax deducted from his salary, the employer would be an assessee in default for that amount.