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TMI Blog1964 (4) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... l has jurisdiction to give directions to the appropriate authority to cancel the assessment made on the association of persons and to give appropriate directions to the authority concerned to make a fresh assessment on the members of that association individually. The answer given by the High Court to the question propounded is correct. Appeal dismissed. - Civil Appeal No. 673 of 1963 - - - Dated:- 30-4-1964 - K. SUBBA RAO., J. C. SHAH. And S. M. SIKRI JUDGMENT SUBBA RAO J.- The question for decision in this appeal is whether when the Income-tax Officer in his discretion assessed an association of persons to income-tax, the Appellate Assistant Commissioner in appeal or Appellate Tribunal in further appeal can set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Officer levies the income-tax in respect of the total income of the previous year of an association of persons upon the said association of persons as a collective unit, whether the Tribunal is competent to direct the Income-tax Officer to levy the income-tax proportionately upon the individual members of the said association of persons in respect of the proportionate income of each of the members constituting the said association of persons. A Division Bench of the High Court held that the Appellate Tribunal had power to set aside the Income-tax Officer's assessment against the association and to give consequential and ancillary directions to the said officer to assess the individuals. Learned counsel for the revenue cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d family, company and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually. 14. (2) The tax shall not be payable by an assessee--.... (b) if a member of an association of persons other than a Hindu undivided family, a company or a firm, in respect of any portion of the amount which he is entitled to receive from the association on which the tax has already been paid by the association. 30. (1) Any assessee objecting to the amount of income assessed under section 23....or the amount of tax determined under section 23....or denying his liability to be assessed under this Act....may appeal to the Appellate Assistant Commissioner against the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntity described therein. The section expressly treats an association of persons and the individual members of an association as two distinct and different assessable entities. On the terms of the section the tax can be levied on either of the said two entities according to the provisions of the Act. There is no scope for the argument that under section 3 the assessment shall be only on the association of persons as a unit though after such assessment the share of the income of a member of that association may be added to his other income under section 14(2) of the Act. This construction would make the last words of the section, viz., members of the association individually a surplusage. This argument is also contrary to the express prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on him to do so, but because it is part of the process of assessment; that is to say, he has to ascertain who is the person liable to be assessed for the tax. If he seeks to assess an association of persons as an assessable entity, the said entity can object to the assessment, inter alia, on the ground that in the circumstances of the case the assessment should be made on the members of the association individually. The Income-tax Officer may reject its contention and may assess the total income of the association as such and impose the tax on it. Under section 30 an assessee objecting to the amount of income assessed under section 23 or the amount of tax determined under the said section or denying his liability to be assessed under the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n disposing of such an appeal the Appellate Assistant Commissioner may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment ; under clause (b) thereof he may set aside the assessment and direct the Income-tax Officer to make a fresh assessment. The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is conterminous with that of the Income-tax Officer. He can do what the Income-tax Officer can do and also direct him to do what he has failed to do. If the Income-tax Officer has the option to assess one or other of the entities in the alternative the Appellate Assistant Commissioner can direct him to do what he should have done in the circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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