Association of Persons: absence of volition, pooling or joint management means co-owners are individually assessable for rental slabs.

Whether joint owners of commercial property constitute an Association of Persons for service tax depends on volition to act together, jointness of purpose to generate income, and joint management or pooling of receipts; mere co-ownership with separate undivided shares and separate receipt and crediting of rents does not establish an AOP. Applying these principles to renting of immovable property, absent evidence of a conscious agreement to pool income or manage jointly, co-owners are assessable individually and may claim slab exemptions on their respective shares; therefore collective aggregation is not warranted under the stated legal tests.

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Issues: Whether joint owners of a commercial property are to be assessed collectively as an "association of persons" for service tax purposes (thereby aggregating total rent and denying individual slab exemptions) or are entitled to individual assessment and individual slab exemption in respect of their respective undivided shares of rental income.

Analysis: The legal framework involves the statutory definitions and charging provisions under the Finance Act, 1994 including provisions identifying "person" and "association of persons" and the charging provision applicable to renting of immovable property (Section 66B). Jurisprudence on the concept of "association of persons" requires a voluntary meeting of minds, jointness of purpose (particularly to produce income), and joint management or concerted action to constitute an association; mere co-ownership or receipt of rents in common does not, by itself, create an association of persons. The existence of separate undivided shares, separate receipt and crediting of rents to each co-owner, absence of pooling or joint management, and absence of evidence of a conscious agreement to act together for a common commercial purpose weigh against treating co-owners as an association. Precedents and principles cited establish that an association arises only where there is volition to join for a common enterprise producing income; automatic or incidental co-ownership (e.g., by inheritance or joint purchase) without joint management does not satisfy that test.

Conclusion: Joint owners who hold undivided shares and receive rental consideration separately, without volition to act together, pooling of consideration or joint management, are not an "association of persons" for service tax assessment. Such co-owners are entitled to be assessed individually and may avail individual slab exemptions in respect of their respective shares of rental income. The appeals are allowed and impugned orders are set aside, with consequential relief as per law.

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