The Custodian appointed under the Special Courts Act is not a Representative Assessee under section 160(1)(iii) of the Income Tax Act.

Headnote:
INCOME TAX - REPRESENTATIVE ASSESSEE - CUSTODIAN APPOINTED UNDER SPECIAL COURTS ACT - NOT A REPRESENTATIVE ASSESSEE - SECTION 160(1)(III) OF INCOME TAX ACT - CONDITIONS NOT FULFILLED.
Fact of the Case:

The issue before the court was whether the Custodian appointed under the Special Courts Act was a Representative Assessee under section 160(1)(iii) of the Income Tax Act.
Finding of the Court:

The court held that the Custodian was not a Representative Assessee under section 160(1)(iii) of the Income Tax Act. The court reasoned that the Custodian was not appointed by the Court, did not manage the properties of the Notified Parties, and did not receive income on their behalf.
Issues: 1. Whether the Custodian appointed under the Special Courts Act was a Representative Assessee under section 160(1)(iii) of the Income Tax Act? 2. Whether the Notified Parties were under a disability to file returns under the Income Tax Act?
Ratio Decidendi: The court held that the Custodian was not a Representative Assessee under section 160(1)(iii) of the Income Tax Act because: * The Custodian was not appointed by the Court. * The Custodian did not manage the properties of the Notified Parties. * The Custodian did not receive income on their behalf. The court also held that the Notified Parties were not under a disability to file returns under the Income Tax Act.
Final Decision: The court dismissed the application.

JUDGMENT - S.N. VARIAVA, J. :---The points raised by this application have already been answered by an order dated 20th February, 1995. In that order the Court has inter alia held as follows: "82. Dr. Balasubramanian also submitted that by virtue of sections 2 and 11 of the Special Courts Act, in effect a Notified Party was put into a civil death. He submitted that the Notified Party has an absolute disability. He submitted that the Custodian became a Representative Assesse on behalf of the Notified Parties. He submitted that now it was the duty and the obligation of the Custodian to file returns and pay taxes.

83. At this stage Mr. Bobde interrupted and informed Court that these must not be deemed to be arguments on behalf of the Income Tax Department. One Mr. K.V. M. Pai, Commissioner of Income Tax, II Circle also asked Mr. Bobde to inform Court that Dr. Balasubramanian was not instructed by the Tax Department to make any such submissions on their behalf. Dr. Balasubramanian then stated that he was merely assisting the Court. In my view this last submission of Dr. Balasubramaninan i.e. that the Custodian is a Representative Assessee, merely needs to be stated to be rejected. All that has happened is that the properties stand attached under the provisions of the Special Courts Act. There is no vesting of properties in the Custodian. The Custodian is neither an agent nor a guardian nor a manager nor an administrator nor a trustee of the Notified parties. The Custodian does not become the owner of the property nor does he step into the shoes of a Notified party. The Custodian is merely an Officer of this Court and nothing more. He has to deal with the property as per the directions of the Court. (Emphasis supplied)

2. Mr. Bobde however requested the Court to reconsider certain aspects. He submitted that the decision of the Court that the Custodian is not a Representative Assessee is not correct. He submitted that under section 160(1)(iii) of the Income Tax Act any person who manages property on behalf of another and receives income on behalf of another is a Representative Assessee. He submitted that under section 3 and 4 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, the Custodian was authorised to deal with the properties which were attached. He submitted that after notification the Notified Parties were under a disability as all their properties were now under the control of the Custodian. He submitted that the Custodian was receiving income on behalf of the Notified Parties and therefore the Custodian was a manager as contemplated by section 160(1)(iii) of the Income Tax Act. Mr. Bobde relied on the case of (Emperor v. B.H. Desouza)1, reported in I.L.R. Vol. 35 Bom. 412, wherein on page 417 it has been held that it is a recognised rule with regard to interpretation of clauses of comprehensive nature that they are not to be taken as strictly defining what the meaning of a word must be under all circumstances, but merely as declaring what things may be comprehended within the term where the circumstances require that they should.

3. Mr. Bobde submitted that therefore what the Court has to see is what is required under section 160(1)(iii) of the Income Tax Act. He submitted that under section 160(1)(iii) of the Income Tax Act any person who manages property and/or receives income would be included. He submitted from this point of view the Custodian was a Representative Assessee.

4. On the other hand Mr. Mistry and Mr. Joshi submitted that Custodian could never be a Representative Assessee. They submitted that before section 160(1)(iii) of the Income Tax Act could apply certain conditions had to be fulfilled viz.,

a) that a person should have been appointed by or under the order of the Court. They submitted that this also becomes clear from the categories of person mentioned in section 160(1)(iii) of the Income Tax Act.

b) that the person should be managing the property on be

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