Section 155(2) — the law in short
What the courts have decided on section 155(2), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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ITO v Ch. Atchaiah
Supreme CourtHelps department
The Department assessed my share of a gain in my own hands years ago and has now issued a notice seeking to assess the same gain in the hands of the association. Has it not already exercised its option?
There is no such option under the Income-tax Act, 1961. The Supreme Court held that unlike section 3 of the Indian Income-tax Act, 1922 — which expressly allowed the officer to charge either the association of persons or the members individually — section 4 read with section 2(31) of the 1961 Act contains no words giving any such choice, and that the officer 'can, and he must, tax the right person and the right person alone'. It follows that the fact that a wrong person has been taxed on an income does not preclude the Assessing Officer from taxing the right person on it, whichever course is more beneficial to the Revenue; the person wrongly taxed has his own remedies. Where Parliament intended to give a discretion under the 1961 Act it said so expressly — the Court pointed to section 183 as the example.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
