TMI Blog1996 (3) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... seven in number, were having other incomes also. Six of the said legal representatives filed individual returns for the assessment year 1979-80, wherein they included the share of income received from the business, Neela Productions, for the period October 4, 1978, to January 14, 1979. It is also a fact that the Income-tax Officer, Central Circle, Trivandrum, had completed their individual assessments and tax due thereon has also been collected from them. Regarding the seventh legal heir, Smt. C. Meenakshi Amma, she has also been assessed on an income of about Rs. 18,000 which did not include the share income from this business. Notwithstanding the fact that the income received by the legal heirs, six in number out of seven, had been separately assessed in the hands of the individuals, these seven persons jointly as a unit-body of individuals--filed a return of income for the assessment year 1979-80 declaring a total income of Rs. 1,04,490. The Income-tax Officer before whom this return was filed, without noticing the fact that the same income had already been assessed at the hands of the legal heirs, completed the assessment in the status of body of individuals and accepted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1922, it had been held by the courts that once the income of the association of persons was charged to income-tax in the hands of the members individually, there could be no fresh assessment of the income in the hands of the association because that would amount to double taxation of the income. It was also observed that, under section 3 of the Indian Income-tax Act, 1922, the Income-tax Officer had the option to assess either of the two units of assessment and once having exercised the option to assess one unit, it was not open to him to assess the other unit and that under the Income-tax Act, 1961, section 4 did not give any such option to the assessing authority at all. The Appellate Tribunal relied on the decision of the Patna High Court in the case of Mahendra Kumar Agrawalla v. ITO [1976] 103 ITR 688, the decision of the Punjab and Haryana High Court in the case of Rodamal Lalchand v. CIT [1977] 109 ITR 7 and the decision of the Delhi High Court in Punjab Cloth Stores v. CIT [1980] 121 ITR 604 to the effect that section 4 of the Income-tax Act, 1961, did not give any such option to the assessing authority. The Appellate Tribunal also rejected the contention of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sustaining the order of the assessing authority assessing the petitioner in the status of body of individuals. Sri P. K. R. Menon, learned senior counsel appearing for the Department, on the other hand, strenuously contended before us that the fact that the individual members constituting the alleged body of individuals had been wrongly assessed in their individual status will not preclude the assessing authority from assessing the right person subsequently and that under the 1961 Act, unlike the provisions contained in the Indian Income-tax Act, 1922, no option is given to the assessing authority to assess either of the entities and that only in a case where such option is available, the assessing authority can be said to have been precluded from assessing a different entity after assessing the members constituting the said entity in their individual capacity. Learned senior counsel in support of his contention had also pressed into service the decisions of the Supreme Court in ITO v. Bachu Lal Kapoor [1966] 60 ITR 74 and also the decision in ITO v. Ch. Atchaiah [1996] 218 ITR 239. The first decision relied on by learned senior counsel is in support of his contention that on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessing authority under section 4 of the Income-tax Act, 1961, had no option to assess a particular income either in the hands of the individuals or in the hands of the "body of individuals" and that the real question to be decided is as to whether the earlier assessment was made on the right person and that if it is found that the assessment was made on the wrong person nothing precluded the assessing authority from assessing the right person. The Supreme Court had also suggested the remedy available to the aggrieved party to correct the wrong order. It can be seen from the assessment order that the assessing authority has assessed the concern as a body of individuals only because the assessee had filed the return in the status of body of individuals. The assessing authority could not and did not consider the question as to whether the earlier assessment of the share income of the concern at the hands of the individuals was made on the wrong person or as to who is the right person to be assessed in respect of the income which has been returned. This is probably for the reason that the assessing authority while considering the return filed by the "body of individuals" was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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