Authorised controller is not a representative assessee where the company continues to exist for tax assessment purposes.

An authorised controller appointed to manage a company's undertaking under the Industries (Development and Regulation) Act, 1951 did not become the company's assessee or a representative assessee for income-tax purposes. The company continued to exist as the taxable entity, and the controller merely performed the directors' management functions during the period of control. Section 160(1)(iii) of the Income-tax Act, 1961 did not apply because no statutory transfer of assessee status occurred. Accordingly, income-tax arrears attributable to the company's income could not be recovered from the former controller after he ceased to hold office.

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Issues: Whether an authorised controller appointed under section 18A of the Industries (Development and Regulation) Act, 1951, could be treated as a representative assessee or successor for income-tax assessments relating to the company's undertaking after he had ceased to hold office.

Analysis: The undertaking taken over was only the management of the industrial unit and not the ownership of the company's assets. The company continued to exist as the assessee throughout, and the authorised controller merely stepped into the position of the directors for the period of control. Section 18B(1)(e) of the Industries (Development and Regulation) Act, 1951, made the authorised controller the functional equivalent of the directors for management purposes, but it did not transfer the status of assessee to him. Section 160(1)(iii) of the Income-tax Act, 1961, did not apply because the authorised controller was only a temporary representative of the company and not a statutorily fastened representative assessee. Tax arrears attributable to the company's income could not be recovered by treating the former authorised controller as personally liable after his cessation from office.

Conclusion: The authorised controller was not liable as a representative assessee, successor, or otherwise for the assessments in question, and the answer was in favour of the assessee.

Final Conclusion: The tax liability remained that of the continuing company, and the Revenue could not fasten post-tenure assessment liability on the former authorised controller.

Ratio Decidendi: A person appointed only to manage a company's undertaking under a statute does not become a representative assessee unless the statute expressly imposes that liability; where the company continues to exist, assessment must be made against the company and not against the temporary manager or authorised controller after cessation of office.

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