1989 (12) TMI 119

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....n the status of an Association of Persons, the assessee was not eligible to the deduction in view of the provisions of sub-section (3) of section 80L. This was confirmed on appeal. 3. In the further appeal before us it was contended on behalf of the assessee that the trust returned the income only in a representative capacity but the status was taken as 'Association of Persons' for assessment purposes and it could not have any bearing on the question whether the assessee was entitled to the deduction as the beneficial owner of the income. On the other hand, the revenue relied on the provisions of sub-section (3) of section 80L and contended that since the assessment of the trust in the status of Association of Persons has become final, the....

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....ld be taken in the case of the trust can only be the same status as that of the assessee viz. individual. Perhaps the trust attracted higher rate of tax applicable to the status of Association of Persons under the provisions of section 164. But that is only for rate purposes and does not change the status of the trust itself. Even if such a status is taken in the case of a trust erroneously, it will not be binding on the assessee who can certainly question it in the collateral proceedings, because it is well settled that the rule of res judicata does not apply to collateral proceedings. 7. Even if we assume that the status of Association of Persons was correctly taken in the hands of the trust, the assessee is clearly entitled to relief. T....