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TMI Blog1990 (10) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... on said interest income at the time of payment. Section 194A of the Income-tax Act, 1961 laid down that any person, not being an individual or a Hindu Undivided Family, who is responsible for paying any income by way of interest shall, at the time of credit of such income to the account of payee or at the time of payment thereof, whichever is earlier, deduct the income-tax thereon at the rates in force. If the assessee trust come in the category of " individual " or " HUF " within the meaning of those expressions in section 194A, the assessee trust would not be under any legal obligation to deduct the income-tax under said provision. On the other hand, if the assessee trust did not come in the catagory of " individual " and " HUF " within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of interest. The department has now come in appeals before the Tribunal. 5. The submission on behalf of Department is that in the returns, these trusts have described themselves as " body of individuals " and as such, they did not come in the catagory of " individual " or " HUF " within the meaning of those expressions in section 194A of the Act. It was further submitted that section 194A was not a provision defining tax liability but was a provision for collection of tax and as such, the status of beneficiaries should not be given much weight. Attention was drawn to definition of the term " person " in section 2(31) of the Act as including AOP and BOI and it was submitted that the trust as AOP or BOI was bound to deduct income-tax u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r there is one representative assessee or there are two or more of them representing the same beneficial interest or interests. That is why co-trustees would be assessable in the status of " individual ", where they represent beneficiaries who are assessable separately in the status of individual and they would be assessable in the status of HUF where they represent beneficiaries who are assessable in the status of HUF. It is only when they represent beneficiaries who are assessable in the status of association of persons or body of individuals that they would be assessable in the status of association of persons or body of individuals. The fact that assessees mentioned wrong status in the return would not affect the true legal position abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose beneficial interests are represented by trustees. Consequently, provisions of section 194A regarding liability to deduct income-tax on payment of income by way of interest would not be applicable to the trustees of these specific trusts. We do not accept the alternate submission of department to the effect that even if status of trustees for assessment would be " individual " and " HUF ", they could not be treated as " individuals " and " HUFs ". For the application of provisions of section 194A of the Act on the ground that provisions of that section are for collection of tax and not for assessment of tax. We find that the term " individual " and " HUF " in section 194A would be referable to the status in which the person in questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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