Representative Assessee- Definition, Types, and How to Appoint?

Every individual holding a valid Permanent Account Number (PAN) must file their income tax returns by the specified due date. However, in some unique cases, the person holding the PAN may not be in a position to file their returns.In such situations, the person responsible for filing the returns may appoint another individual to carry out their duties and responsibilities on their behalf. The appointed individual is known as the representative assessee under the Income Tax Act of 1961

According to the Income Tax Act of 1961, a representative assessee is a person who acts as a legal representative of another individual. The representative assessee is tasked with carrying out the various income tax-related responsibilities on behalf of the principal (original) assessee. Non-resident individuals and individuals who are absent from India can appoint a representative assessee to file income tax forms and returns and make tax payments on their behalf.The concept of a representative assessee also comes into play in situations where the principal assessee is incapable of carrying out their income tax duties and responsibilities due to being a minor or suffering from an illness or mental instability. In such cases, the individual volunteering to act on behalf of the principal assessee has to appoint themselves as a representative assessee.Here is an example of how the concept of a representative assessee works:Assume you are a non-resident individual staying outside India but with income generated within India. Since you would be unable to file and verify income tax returns , you can choose to appoint another individual, who is a family member staying in India, as your representative assessee. The appointed individual can file and verify your income tax returns on your behalf.Alternatively, let us say that you have a minor son with income within India. Since he is a minor, he can neither file and verify income tax returns on his own nor appoint you as a representative assessee. In this case, you can come forward and register yourself as a representative assessee of your minor son of your own accord.

Under the Income Tax Act of 1961, there are two types of representative assessees: a legal representative and a regular representative assessee. Let us explore each of these two types in more detail.

• Legal Representative A legal representative is an individual appointed to act on behalf of the principal assessee who is incapable of managing their tax-related affairs due to death, mental incapacity, physical incapacity, or being underage (minor). A legal representative is usually appointed by the court or through the signing of a power of attorney. In some cases, the representative assessee themselves may volunteer to represent the principal assessee by filing a formal request with the Income Tax Department.
• Representative Assessee A representative assessee is an individual appointed to act on behalf of the principal assessee. Unlike a legal representative, the principal assessee appoints the representative by filing a formal request with the Income Tax Department.

As a representative assessee, the individual has certain roles and responsibilities that they need to fulfil. Here is a quick overview of what they are.

• The representative assessee is responsible for filing and verifying the principal assessee's income tax returns within the specified due dates.
• The representative assessee is responsible for paying outstanding taxes on behalf of the principal.
• The representative assessee is responsible for responding to the various notices that the Income Tax Department (ITD) issues on behalf of the principal assessee.

The representative assessee has certain rights that they can exercise and a few liabilities that they must abide by. Let us look at some of the key rights and liabilities that they have.

• The representative assessee is liable to clear all outstanding tax dues that the principal assessee may have.
• The representative assessee has the right to recover the tax that they paid from the principal assessee. They also have the right to claim income tax refunds from the Income Tax Department on behalf of the principal assessee.
• In the case of a disagreement between the representative assessee and the principal assessee, the representative assessee has the right to approach the assessing officer and obtain a certificate from them for the settlement of the tax dues that they paid on behalf of the principal assessee.
• The representative assessee has the right to file an appeal against an order that an assessing officer passes.

A representative assessee can be appointed online through the Income Tax India e-filing portal. Here is a step-by-step guide detailing the appointment process.

• Step 1: Visit the Income Tax India e-filing portal and log into your account using your credentials.
• Step 2: Under ‘Authorised Partners’, click on ‘Authorise another person to act on behalf of self’.
• Step 3: Click on ‘Let's Get Started’.
• Step 4: Click on ‘Add Authorised Signatory’.
• Step 5: Select the appropriate reason for appointing a representative assessee from the drop-down list.
• Step 6: Enter the PAN of the person who you would like to appoint as an authorised signatory.
• Step 7: Select the period of appointment or the task for which you are authorising the individual.
• Step 8: Click ‘Continue’ to proceed.
• Step 9: Enter the six-digit one-time passwords (OTPs) sent to your registered mobile number and email ID in the respective fields.
• Step 10: Click ‘Verify’ to proceed.
• Step 11: Once your request is verified, proceed to submit the request.
• Step 12: Upon submission of your request, the representative assessee will be notified of your appointment.

For the appointment process to be complete, the representative assessee must accept the request by logging into their Income Tax India e-filing portal and clicking on ‘Worklist’ under the ‘Pending Actions’ tab. Also read: E-Filing 2.0: New Income Tax E-filing Portal Explained

If the principal assessee is a minor, deceased, declared a lunatic or idiot, or mentally incapacitated, you can register yourself as their representative assessee. Here is the step-by-step process you need to follow in this case:

• Step 1: Visit the Income Tax India e-filing portal and log into your account using your credentials.
• Step 2: Under ‘Authorised Partners’, click on ‘Register as Representative Assessee’.
• Step 3: Click on ‘Let's Get Started’.
• Step 4: Click on ‘Create a New Request’.
• Step 5: Select the appropriate category of the assessee you wish to represent from the drop-down list.
• Step 6: Enter the details of the person you wish to represent, such as their PAN and date of death (in the case of the death of the principal assessee).
• Step 7: Attach all the relevant documents and click ‘Continue’.
• Step 8: Complete the request verification process by entering the six-digit one-time passwords (OTPs) sent to your registered mobile number and email ID.
• Step 9: Once the verification is complete, submit the request.
• Step 10: The Income Tax Department (ITD) will be notified of the same. Once the department accepts your request to act as the representative assessee, you can proceed to pay taxes and file income tax returns for the principal assessee.

The concept of a representative assessee is a useful addition for taxpayers who are incapable of paying taxes, filing and verifying income tax returns, and carrying out other tax-related affairs. If you plan to appoint a representative assessee, remember to specify the period for which you are providing authorisation. This way, you can prevent the authorised individual from misusing the rights you have conferred on them.Ready to make the most of your money? Start your tax planning journey now!