Grandfather can't be taxed for minor's income under Income-tax Act

The Tribunal dismissed all appeals of the Revenue, holding that a minor's income cannot be assessed in the hands of a grandfather as a representative assessee under section 160(1)(ii) of the Income-tax Act. The Tribunal found that the grandfather did not meet the criteria of a representative assessee as defined in the Act, as he was not appointed by a court to receive income on behalf of the minor. Therefore, the minor's income was not taxable in the hands of the grandfather.

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Issues Involved: Assessment of minor's income in the hands of a grandfather as a 'representative assessee' u/s 160(1)(ii) of the Income-tax Act, 1961.

Summary:
1. The appeals filed by the Revenue pertain to assessment years 2003-04 to 2008-09, addressing the issue of assessing a minor's income in the hands of a grandfather as a 'representative assessee' u/s 160(1)(ii) of the Act.

2. The minor's income was previously clubbed with her father's income until his death, after which her grandfather filed returns on her behalf, claiming she was not taxable due to being a minor. The Assessing Officer added her income as a prima facie addition u/s 143(1) for the assessment year 1994-95, which was later set aside by the ITAT. The Tribunal held that a minor's income cannot be assessed in the hands of a grandparent if both parents are deceased, as per section 64(IA) and section 160(1)(ii) of the Act.

3. The provisions of section 160(1)(ii) define a 'representative assessee' as the guardian or manager entitled to receive income on behalf of a minor. The Tribunal found that the grandfather did not fit the definition of a representative assessee, as he was not appointed by a court to receive income on behalf of the minor. The Tribunal upheld that the minor's income cannot be assessed in the hands of the alleged representative assessee under the existing law.

4. The Tribunal dismissed all appeals of the Revenue, citing that the minor's income cannot be assessed in the hands of the grandfather as a representative assessee u/s 160(1)(ii) of the Act.

5. The appeals of the Revenue were dismissed based on the Tribunal's interpretation of the provisions of section 160(1)(ii) and (iii) of the Act, as the conditions for assessing the minor's income in the hands of the grandfather were not met.

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