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Court Appointed Official Assignee has to obtain a separate PAN in the status of Artificial Juridical Person for each of the Estate of Insolvent

30 January 2019

CBDT issued Circular No. 04/2019, on 28th January 2019 providing Clarification regarding Liability and Status of Court appointed Official Assignee, where an Order of Insolvency is passed against a Debtor and the property of the debtor gets vested with the Court appointed Official Assignee. Now the Official Assignee has to obtain a separate PAN in the status of Artificial Juridical Person & file the Income Tax return for each of the estate of insolvent.

 

Clarification of circular regarding status of Official Assignees,

It is hereby clarified that since Official Assignee does not receive the income or manage the property on behalf of the debtorthey cannot be considered as a 'Representative Assesse' of the debtor under the Act while computing the tax-liability arising from the estate of the debtor.

 

Status of Official Assignees

As property of the insolvent is vested with the Official Assignee as per specific provisions of the Act/Law regulating functioning of the Official Assignee's, They have to be treated as a 'juristic entity' for purposes of the income-tax Act, as prescribed in section 2(31)(vii) of the Act, not being one of the 'persons' falling in sub-clauses (i) to (vi) of section 2(31) of the Act.

 

Liability of Official Assesse

Ø  Therefore, Official Assignee is required to file a separate income-tax return in the ITR Form applicable to 'artificial juridical person'  foreach of the estate of the insolvent ,and

Ø  The income shall be taxed as per the rates applicable in a particular year to an 'Artificial juridical person'.

In view of the above position, Official Assignee would have to obtain a separate PAN for each of the estate of the insolvent.

For further details please refer the below mentioned link:

https://www.incometaxindia.gov.in/communications/circular/circular_4_2019.pdf

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