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TMI Blog2019 (10) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... ome - Section 3(42) of the General Clauses Act, 1897 defines the term person for itself and for all Central Acts and Regulations to be made thereafter, unless there is anything repugnant in the subject or context. It defines a person to include any company or body of individuals, whether incorporated or not. The issue involved in all these appeals is that the appellants are co-owners of their properties leased out to tenants. The properties are jointly held, and the rental received is assessed under the Income Tax Act 1961 separately for each co-owner. The Applicant, along with the other co-owners, jointly owned an immovable property and rented it out to the central authority after executing a contract jointly to that effect. Each of the co-owners receives the rental proportionate to his share in the immovable property and the income tax authority assesses him separately on the income so received. Although the co-owners have jointly executed the contract and the service of renting the property cannot be supplied separately by any of the co-owners, it appears there is a judicial unanimity against treating the co-owners as an association of persons for taxation where their income fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the central authority has, in response to a dispute regarding deduction of TDS in terms of section 51 of the GST Act, clarified that the Applicant, along with the other co-owners of the property, should be treated as a person as defined under section 2(84)(f) of the GST Act. 1.4 The Application is, therefore, admitted, treating the Applicant as an unregistered person. Being unregistered, neither the central nor the State tax administrations exercise ascertained administrative jurisdiction on the Applicant. Requirements under section 98(1) of the GST Act are, therefore, dispensed with. 2. Submissions of the Applicant 2.1. The Applicant submits that each of the co-owners receives the rental proportionate to his share in the immovable property and the income tax authority assesses him separately on the income so received. Merely because several persons jointly own an immovable property they cannot, therefore, be treated as 'an association of persons or a body of individuals. 2.2 The co-owners, including the Applicant, have not been considered 'an association of persons or a body of individuals' for the purpose of Income Tax. These co-owners have not formed any association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sociation of persons or body of individuals' is contrary to section 3(42) of the General Clauses Act, 1897 and section 26 of the Income Tax Act, 1961. The High Court, however, holds that the Parliament has the legislative competence to define 'person' in a statute and that cannot be declared unconstitutional in the absence of it being arbitrary, discriminatory or violative of Art 14 of the Constitution. 3. Observations & findings of the Authority 3.1 Although the concerned officer from the Revenue, as understood in the context of section 98(1) of the GST Act, is not ascertainable for an unregistered person, who is not allotted to the administrative jurisdiction of either the central or the State tax administration, clarification of the central authority, as referred to in para 1.3, needs to be discussed in some detail. 3.2 The central authority believes that an association of persons means two or more persons who collaborate for a mutual determination with a vision to earn an income. It relies on Jaswant Singh Mann (supra) wherein the petitioners are owners of the premises in question and are receiving rental from the tenant, though individually. The High Court, according to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly held, and the rental received is assessed under the Income Tax Act 1961 separately for each co-owner. 3.8 The Revenue argues that the individual co-owners have come together to form associations of persons to rent out the property to the tenant. The service provided is, therefore, indivisible. It cannot be provided if one single co-owner recedes from the agreement for renting the property. The service provided flows along with the property leased to the tenant and, therefore, the co-owners have to be considered as an association of persons. Income from such renting is assessed under the Income Tax Act, 1961 at the hand of each co-owner separately is not the sufficient reason to conclude that they are to be assessed separately for service tax as well. Law and practice under the IT Act should not be applied to decide a matter under the Service Tax. 3.9 The Tribunal observes that whether the individual co-owners are eligible for the threshold for exemption has been decided in Vishrambhai Patel (supra). In Sarojben Khusalchand [2017 (4) GSTL 159 (Tri - Ahmd)] = 2017 (5) TMI 240 - CESTAT AHMEDABAD the Tribunal had the occasion to analyse whether the co-owners could be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have jointly executed the contract and the service of renting the property cannot be supplied separately by any of the co-owners, it appears there is a judicial unanimity against treating the co-owners as an association of persons for taxation where their income from renting is separately ascertainable and assessed for income tax individually at the hand of each co-owner. 3.14 This Authority, therefore, concludes that the co-owners of a jointly held immovable property cannot be treated as an association of persons for determining the liability and requirement of registration under the GST Act where their income from renting is separately ascertainable and assessed for income tax individually at the hand of each co-owner. In so doing this Authority agrees with the views of the Kerala AAR in Elambrancheri Khaldoon (supra). In view of the foregoing, we rule as under. RULING The Applicant and the other two co-owners cannot be treated as an association of persons and, therefore, as a person defined under section 2(84)(f) of the GST Act, where their income from renting is separately ascertainable and assessed for income tax individually at the hand of each co-owner. Whether the App ..... X X X X Extracts X X X X X X X X Extracts X X X X
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