Double taxation barred where members of an association are already assessed on the same income

The assessing authority could assess either the members of an association of persons individually or the association itself, but not both on the same income. Where the members had already been separately assessed on their respective shares, a further assessment of the association on that income would amount to simultaneous taxation and double taxation. The text notes that contrary High Court views did not displace the binding line of authority supporting this principle. The same income therefore could not be taxed again in the hands of the association after assessment of the members.

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Issues: Whether the same income, after being assessed in the individual hands of the members of an association of persons, could again be assessed in the hands of the association.

Analysis: The applicable legal position was that, under the earlier Act and as applied under the later Act, the assessing authority had an option to assess either the members of the association individually or the association as such, but not both in respect of the same income. Once the members had been separately assessed on their respective shares, a subsequent assessment of the association on the same income would amount to simultaneous taxation and double taxation. The existence of some contrary High Court views did not displace the prevailing principle accepted in the binding line of authority relied upon by the appellate authority.

Conclusion: The same income could not be taxed again in the hands of the association after assessment of the members individually. The issue was decided in favour of the assessee.

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