An assessee is any individual who is liable to pay taxes to the government against any kind of income earned or any losses incurred by him for a particular assessment year. Each and every person who has been taxed in the previous years for income earned by him is treated as an Assessee under the Income Tax Act, 1961.
An Assessee may be any individual liable to pay taxes for himself or to pay tax on behalf of somebody else. The Income Tax Act, 1961 has classified Assessee in different categories. An Assessee may either be a normal Assessee, a Representative Assessee, a Deemed Assessee or an Assessee in Default.
Let us understand what the various categories of Assesses as laid down in the Act are and who all belong to the respective categories of being an Assessee:
- Normal Assessee:
A normal Assessee is an individual who is liable to pay taxes for the income earned by him for a particular financial year. Each and every Individual who has paid taxes in preceding years against the income earned or losses incurred by him is liable to make payments to the government in the form of tax. Any individual who is supposed to make payments to the government in the form of interest or penalty or anybody who is entitled to tax refund under the IT Act is an Assessee. All such individuals are grouped under the category of Normal Assessee.
- Representative Assessee:
Many times, it so happens that an individual is liable to pay taxes for income or losses incurred not only by him, but also for income or losses incurred by a third party. Such an individual is known as Representative Assessee. Basically, he acts as a representative for people who themselves are not in a position to file and pay their taxes themselves. Generally, the people who need representatives are non-residents, minors or lunatics. And the people representing them are either their agents or guardians. Such people are deemed to be Representative Assesses.
- Deemed Assessee:
Deemed Assessee is an individual who is put in a position to pay taxes for some other person by the legal authorities. Generally, the individuals who are treated as Deemed Assesses are:
- The executors or the legal heir of the property of a deceased person, who in written has passed on his property to the executor, is treated as a Deemed Assessee.
- The eldest son or any other legal heir of a deceased individual (who has expired without writing his will) is treated as a Deemed Assessee.
- The guardian of a minor, a lunatic or an idiot is treated as a Deemed Assessee.
The agent of a Non-Resident Indian (having Income Sources in India) is treated as a deemed Assessee.
An Assessee-in-default is an individual who has failed to fulfill his legal duty of paying tax to the government. An employer is deemed to be an Assessee in default if he fails to submit the TDS deducted by him to the government. An employer is supposed to disburse salary to his employees after deducting TDS from their salary and submit the same to the government. However, if he fails to do so then he is treated as an Assessee-in-default.
The Assesses must make sure to file their returns on time and pay taxes as and when due. However, many times an Assessee might fail to file his return on time. In this case, he might receive a notice from the IT department or the concerned Assessing Officer, asking for details as to why the return has not been filed for that particular financial year. The Assessee in this case has to mandatorily send a reply to the Assessing officer stating the reason behind his failure to file his returns on time and also file the same as soon as he receives the notice.
Let us take a quick look at the various roles and responsibilities of an Assessee upon receiving a notice:
- The Assessee must make sure to file his tax returns for the evaded income for the particular assessment year as soon as he receives the notice from the department.
- Having filed the returns, he may request the assessing officer for a copy which clearly indicates the reasons for which the notice has been issued by the officer to him.
- If the Assessee feels that the reasons stated in the copy are not valid, and that he is not satisfied with the reasons, he may choose to file an object and challenge the notice and its validity.
- The Assessee must also make sure that he has solid reasons to file the objection and that he has rightfully decided to raise questions on the notice issued by the government to him.
- The Assessee may also choose to put forward a request to the concerned Assessing Officer and ask him to give other reasons, if the claims made by Assessee are dismissed by the officer.
- With the help of a writ petition filed with the respective High Court, the Assessee may choose to challenge the legality of the notice much before the completion of the scheduled assessment or re-assessment.
- With the help of a writ petition filed with the respective High Court, the Assessee may also choose to challenge the legality of the notice even after completion of the scheduled assessment.
- The Assessee has to mandatorily furnish details pertaining to his income returns within a period of 30 days from the date of issuance of the notice and not from the date on which the notice has been received by the Assessee. The details pertaining to the income for which tax payment has been avoided and other related income details must be clearly furnished and submitted to the concerned officer in order to avoid problems at a later stage.
The Assessee has to ascertain that :
* He has put forward a request to the Assessing Officer asking for reasons as to why the notice has been issued by him.
* He has lodged an objection to the given notice and the reasons given to him by the Assessing Officer as he finds them to be unsatisfactory.
* He has knowingly challenged the validity of the issued notice.