protective assessment

When there are doubts about true ownership of the income, a protective assessment is made.

For example if there are doubts as to whether a rental income belongs to Mr. A or Mr. B, then the assessing officer at his own discretion may add the rental income to any one of them on a protective basis. This is done ensure that in finality of the owner of the income, the addition of income is not denied because of limitation of time.

In the words of Dr. Vinod Gupta......

"Though there is no provision in the income tax act authorizing the levy of income tax on a person other than whom the income tax is payable, yet it is open to the authorities to make a protective or alternative assessment if it is not ascertainable who is really liable to pay the tax among a few possible persons......"

it is a kind of assessment whereby the assessing officer, not knowing the true ownership of the asset, the income of which he wants to tax, deems the incomes of all the persons who are actually claiming to have there rights over there.......... further he says........

"it must, however be noted that while protecticve assessment is permissible, a protective order for recovery is not permissible. in making a protective assessment, the authorities are merely making an assessment and leaving it as a paper assessment until the matter is decided (as to whom the asset owned by) one way or another. further more, a protective order of assessment can be passed but not a protective order of penalty."

and as & when the final assesssment is made, the department must recover the tax from the person in whose hands the income is finally assessed.....

Its when u r not sure bout the true ownership of Income

Will Interest U/S 234A,B,C be levied on the protective assessment ?

can the assessing authority tax the income of a charitable trust registered U/S 12 A by cancelling the Registration and imposing protective assessment..........?

Yes Int U/s 234A 234B 234C Is levied

"Protecticve assessment is permissible, a protective order for recovery is not permissible"

IS THERE ANY DECISSION IN FAVOR OF THE ASSESSE FOR CITATION