TMI Blog1994 (8) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... trate (E. O. II), accepting the contention of the respondents/accused that the first respondent has to be treated as an individual, discharged the respondents as no offence was made out under the Act. Therefore, the complainant has come forward with these revisions. The first respondent, Messrs. Arihant Trust, is a private trust, formed for the benefit of 27 persons under the trust deed, exhibit P-41. Respondents Nos. 2 to 5 are the trustees of the first respondent and the activities of the trust, namely, carrying on the business of drilling wells and installing water pumps, are carried on by respondents Nos. 2 to 5 for the benefit of the abovesaid 27 beneficiaries. The income of the first respondent-trust for the year ended with January 31, 1983, has been distributed to its beneficiaries. Section 194A of the Act directs that any person other than an individual or a Hindu undivided family, who pays any income by way of interest to a resident, shall deduct income-tax thereon. As the first respondent-trust, in violation of this provision, namely, section 194A of the Act, paid the entire interest amount without deducting income-tax, the petitioner herein found it to be a violation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Officer to assess the tax on the trustees as per section 164(1) of the Act. Section 164(1) relates to the charge of tax where the shares of the beneficiaries were not known or not specifically receivable or the income receivable was indeterminate. Therefore, when the shares of the beneficiaries could not be ascertained under section 164 of the Act, the tax shall be charged on the relevant income at the maximum marginal rate. But under section 164(1) of the Act also, this assessment is only on the person who is a representative assessee as referred to in section 160(1)(iii) and (iv) of the Act. Section 160 of the Act defines the representative assessees and under section 160(1)iv), "in respect of income which a trustee appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise (including any wakf deed which is valid under the Mussalman Wakf Validating Act, 1913 (6 of 1913)), receives or is entitled to receive on behalf, or for the benefit, of any person, such trustee or trustees :" Therefore, in this case, the first respondent trust is a representative assessee on behalf of the beneficiaries of the trust. Section 161(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the criminal court has to judge the case independently on the evidence placed before it. In another decision cited by learned counsel Associated Industries v. First ITO [1983] 139 ITR 269 (Mad), it is held that a complaint filed by the Income-tax Officer was independent of the assessment order passed by him and there could be parallel proceedings both in civil and criminal courts, that the proceedings before the income-tax authorities should be construed only as civil proceedings and it was for the complainant to establish offences in the criminal court. In this decision also, the criminal proceedings are said to be proceedings independent of the assessment order. There cannot be a second view with regard to the responsibility of the criminal court to judge independently on the evidence placed before it, but at the same time as observed above by the Supreme Court, the criminal court may arrive at its conclusion after giving due weight to the order passed under the Act and it need not always take a different view. Learned counsel for the respondents relying upon the decision of the Kerala High Court in Madras Spinners Ltd. v. Dy. CIT [1993] 203 ITR 282 would argue that when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... skar v. CIT [1969] 74 ITR 33 is another decision of the Supreme Court on this question. In that case, after narrating the definition of person occurring in section 2(31) of the Act of 1961, it was argued that there was no ambiguity with regard to the word "individual" under the Act of 1961, but it had the restricted meaning under section 3 of the old Income-tax Act of 1922. In answer to that argument, the Supreme Court observes : "On a comparison of the provisions of the two Acts, counsel on behalf of the appellant contended that a restricted meaning should be given to the word 'individual' in section 3 of the earlier Act. We see no justification for this argument. On the other hand, we are of the opinion that the language employed in the 1961 Act may be relied upon as a parliamentary exposition of the earlier Act even on the assumption that the language employed in section 3 of the earlier Act is ambiguous. It is clear that the word 'individual' in section 3 of the 1922 Act includes within its connotation all artificial juridical persons and this legal position is made explicit and beyond challenge in the 1961 Act." In ITO v. Deepak Family Trust (No. 1) [1988] 73 CTR (Trib.) 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of section 64(1) of the Act, the individual is the person who is being assessed in his individual capacity. As section 64(1) of the Act directs to include the individual income of spouse and minor child for the purpose of tax, naturally only an individual can have spouse and minor child and therefore in that case, it was viewed that the individual referred to in section 64(1) of the Act necessarily should relate to a human being. Therefore, this analogy is not applicable for this case. Learned counsel for the revision petitioner refers to another decision in CWT v. Bowring Institute [1992] 194 ITR 287, wherein the Karnataka High Court has held that the term "individual" in section 3 of the Wealth-tax Act of 1957 will not bring within its compass an association of persons or body of individuals such as a club registered under the provisions of the Societies Registration Act and, therefore, the assessee, an association of members, running a club is not an individual falling within the scope of section 3 of the Act. It is true that every trust cannot be treated as an individual for the purpose of assessment and in exhibit D-1 order itself, the Commissioner of Income-tax has giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be on the basis of individual. Therefore, for the reason that in the cases cited above, the tax has been deducted at source, it cannot be argued that in this case also, the deduction of tax ought to have been made by the trustees. Learned counsel for the respondents also cited certain decisions of different High Courts wherein the assessee-trust was assessed in a representative capacity under section 161(1) of the Act. It is needless to refer to those decisions because admittedly in this case, the assessment was in line with section 161(1) of the Act. Now, if we take up the question whether the first respondent trust, which was assessed treating it as an individual, has to be treated as an individual under section 194A of the Act, as discussed above, even an artificial juridical person can be treated as an individual under section 194A of the Act, as there is nothing to restrict the applicability of the word "individual" only to a natural person or a human being and it applies to artificial juridical persons also, the first respondent which was treated as an individual while receiving the income of its business on behalf of its beneficiaries, there is no necessity to change ..... X X X X Extracts X X X X X X X X Extracts X X X X
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