These 4 appeals for financial years 2001-02 to 2004-05 filed by assessee against consolidated order of CIT(A) passed in appeal Nos. 125 to 128/2006-07, dt. 18th Oct., 2006 were heard together and are being disposed off through this single order as facts and issue involved in grounds of appeals are identical except variation in demands i.e., of Rs. 1,82,349, Rs. 2,53,113, Rs. 1,95,457 and Rs. 2,52,054 raised during financial years 2001-02 to 2004-05 respectively, for sake of convenience. identical grounds of appeal taken by assessee in instant appeals are stated as under: "1. That learned CIT has erred in law and on facts in confirming order made under s. 201(1) and 201(1A) r/w s. 194A of IT Act, 1961, by ITO, TDS Ward 49(2), New Delhi. That learned CIT has erred in law and on facts in not accepting proposition that as status of trustees is that of beneficiaries, status of trust becomes "individual" and accordingly provisions of s. 194A are not attracted." Briefly, facts relating to issues involved in grounds of appeals are that assessee is PF Trust of Employees created after seeking exemption under s. 16 of EPF Act. Consequent to recognition and exemption by PF CIT, trust was also recognized under 4th Schedule of IT Act by CIT Delhi. Survey proceedings were conducted in premises of assessee and it was seen that interest being credited in account of ex-employees after cessation of employment part-took character of interest and as such according to AO assessee was liable for deduction of tax at source under s. 194A of IT Act, 1961. AO further noticed that Trust did not have any TAN number nor was it filing any TDS returns. Hence, according to AO since assessee- trust had not deducted tax at source, demands under s. 201(1) and 201(1A) for all above financial years was raised against assessee. Aggrieved assessee filed appeal and submitted before CIT(A) that in instant cases Department while holding assessee-trust in default as per provision of s. 201(1) and 201(1A) r/w s. 194A of IT Act, 1961 has not determined status of assessee as per provisions of s. 2(31) of IT Act, 1961 which gives definition of word person . Further, that since assessee trust was to be assessed as individual, so, as per provisions of s. 194A assessee as individual cannot be held to be in default for non- deduction of tax at source and therefore demands raised by Department under s. 201(1) and 201(1A) are liable to be cancelled. In support of contentions learned Authorised Representative for assessee referred to various case laws, as detailed in order of CIT(A). On considering submissions of assessee CIT(A) observed that t h e case law referred to by learned Authorised Representative for assessee in case of M.L. Family Trust vs. State of Gujarat (1995) 127 CTR (Guj) 407: (1995) 213 ITR 152 (Guj) and ITO vs. Arihant Trust (1995) 127 CTR (Mad) 448: (1995) 214 ITR 306 (Mad) for proposition that as status of Trustees was that of beneficiaries, status of Trust becomes individual and so provision of s. 194A were not attracted, were not applicable because issue under consideration related to tax deducted at source whereas decisions cited were rendered in context of prosecution proceedings where n artificial veil was lifted to identify individuals who had to be prosecuted and further because s. 2(31) of IT Act, 1961 defines persons where individuals and AOP etc. are distinctly and categorically mentioned as separate entities. Therefore, considering decision of Tribunal Delhi Bench dt. 29th July, 2005 in case of ONGC Ltd. CPF Trust vs. ITO (2005) 98 TTJ (Del) 1111: (2005) 4 SOT 333 (Del), CIT(A) upheld orders of AO while making following observation: "I find that facts of instant case are pari materia with facts of case of ONGC, in which case Tribunal Delhi has, vide order dt. 29th July, 2005 given finding that appellant fund was liable for deduction of tax at source under s. 194A of Act in respect of credits made to accounts of members of fund who ceased to be employees of trust. Accordingly they held that assessee was in default under s. 201(1)/201(1A) for financial years under consideration. In view of above, respectfully following financial years under consideration. In view of above, respectfully following above decision, I am of opinion that AO has rightly penalized assessee for failure to deduct tax under s. 201(1) and consequent liability under s. 201(1A). Apart from above I am also of opinion that if member of trust continues his membership after cessation of employment with trust, any payment due from such trust would part-take character of interest." Before us learned Authorised Representative for assessee first submitted that in case we go through order of CIT(A) it would be revealed that while upholding order of AO, wherein assessee trust was held in default under s. 194A of IT Act, 1961 for non-deduction of tax at source from interest being credit in account of ex-employees and raised impugned demands under ss. 201(1) and 201(1A), CIT(A) simply placed reliance on decision of Tribunal, Delhi Bench in case of ONGC (supra) Delhi observing that facts of instant cases of assessee were pari materia to facts of case of ONGC (supra) decided by Tribunal. Learned Authorised Representative for assessee further contended that in instant cases of assessee trust he has raised legal issue before CIT(A) that without determining status of assessee-trust under provisions of IT Act, 1961 assessee could not be held to be in default under s. 194A of IT Act, 1961 for non-deduction of tax at source for crediting interest in accounts of its ex- employees. He further contended that since without deciding status of assessee AO could not have held assessee in default under s. 194A demand also cannot be raised against assessee as per ss. 201(1) and 201(1A) of IT Act, 1961. Further, since issue of determination of status of assessee was neither contested before Tribunal in case of ONGC (supra) nor Tribunal adjudicated upon issue of status of assessee trust in case (supra) CIT(A) was not justified in following order (supra) of Tribunal without adjudicating issue regarding status of assessee trust before holding it in default under s. 194A of IT Act, 1961. Learned Authorised Representative for assessee further contended that since various judicial authorities have held status of such assessee-trusts as individuals assessee was not required to deduct tax at source as per provisions of s. 194A of IT Act, 1961 and no demand under ss. 201(1) and 201(1A) should have been raised against assessee and hence CIT(A) was not justified in upholding orders of AO. On other hand learned Departmental Representative for Revenue submitted that since assessee trust was statutory trust it was bound under s. 194A of IT Act, 1961 to deduct tax at source as it was in status of AOP which was covered under definition of person as provided under s. 2(31) of IT Act, 1961. Further, since assessee has not deducted tax at source under s. 194A it was in default and tax authorities have rightly created demand under ss. 201(1) and 201(1A) of IT Act, 1961. However, in support of contentions learned Departmental Representative has not been able to cite any case law. We have considered rival submissions of both parties, perused record and carefully gone through order of tax authorities below as well as case law relied upon by learned Authorised Representative for assessee. In s. 2(31) word "person" is defined as under: "person" includes (i) individual, (ii) HUF, (iii) company, (iv) firm, (v) AOP or BOI, whether incorporated or not, (vi) local authority, and (vii) every artificial juridical person, not falling within any of preceding sub-clauses. relevant portion of s. 194A(1) is reproduced as under: "Any person, not being individual or HUF, who is responsible for paying to resident any income by way of interest other than income (by way of interest on securities), shall, at time of credit of such income to account of payee or at time of payment thereof in cash or by issue of cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at rates in force." On conjoint reading of these sections it is clear that before holding assessee in default under s. 194A we have to first determine and adjudicate upon status of assessee trust as "person" as given in s. 2(31) because s per s. 194A "any person" who is individual or HUF is not liable to deduct IT at source from payment of interest. In instant case from orders of AO as well as from order of CIT(A) we find that tax authorities below have not determined status of assessee-trust before holding assessee in default for non-deduction of tax at source as provided under s. 194A of IT Act, 1961. Similarly, on examining order of Tribunal in case of ONGC (supra) we find that neither this plea of determining status of assessee trust as person under s. 2(31) was raised nor same was determined by Tribunal while disposing off that appeal (supra) by holding that assessee was in default under s. 194A and, therefore, that decision (supra) of Tribunal cannot be considered and applied in instant cases when specific legal issue regarding determination of status of assessee trust has been raised by assessee before us as well as before CIT(A), more so, when jurisdictional High Court of Delhi in case of CIT vs. SAE Head Office Monthly Paid Employees Welfare Trust (2004) 192 CTR (Del) 70: (2004) 141 TAXMAN 364 (Del) while deciding point regarding computation of income of assessee trust held as under: "Sec. 164 would come into play only after income has been computed i n accordance with other provisions of Act. Since determination of status of assessee is part of process of computation of income, it is necessary to look into general principles for determining whether status of trustees can be taken to be as AOP or as individual . Sec. 164(1) only lays down rate of tax applicable to discretionary trust. It is not concerned with manner of computation of total income." In this very decision their Lordships while determining status of assessee trust further held that mere fact that beneficiaries or trustees, being representative assessees, were more than one, could not lead to conclusion that they constituted AOP . Their Lordships further held that "assessee trust" would be treated as individual. Similarly, in case of Niti Trust vs. CIT (1996) 135 CTR (Guj) 273: (1996) 221 ITR 435 (Guj) their Lordships held that "the AO was required to determine status of assessee first and only after determining status of assessee AO shall proceed further with assessment. He cannot proceed ahead without determining status of assessee and that is not scheme of Act." In this very decision their Lordships further held that trust was to be assessed as individual for all purposes. Similarly, Hon ble Calcutta High Court in case of CIT vs. Shri Krishna Bandar Trust (1993) 201 ITR 989 (Cal) held that discretionary trust is assessable as individual and not as AOP . Hon ble Gujarat High Court in case of CIT vs. Deepak Family Trust (1994) 119 CTR (Guj) 150: (1994) 72 TAXMAN 406 (Guj), held that status of trustees of discretionary trust have to be assessed in status of individual and not in status of AOP . Similarly, their Lordships of Gujarat High Court in case of M.L. Family Trust (supra) held that beneficiaries were individuals hence status of trustees would be that of individuals and s. 194A of IT Act, 1961 would not apply to them and there was no question of deduction of tax from interest amount credited to accounts of payees or of paying tax after deduction. status of trustees would be that of individuals. Sec. 194A of IT Act, 1961, would not apply to them and there was no question of deduction of tax from interest amount credited to account of payees or of paying tax after deduction. In case of Arihant Trust (supra) it was held that status of trust remained unchanged and it had to be treated as same individual under s. 194A of Act also. As individual was exempted under s. 194A, Department could not prosecute trust and its trustees for failure to deduct tax at source. In CIT vs. T.S.K. Enterprises (2005) 274 ITR 41 (Mad) their Lordships while observing that under s. 161 of IT Act, 1961, tax shall be levied upon and recovered from trustee in like manner and to same extent as it would be leviable upon and recoverable from person represented by him. In other words, income which comes to share of beneficiary has to be assessed as if it were income of beneficiary, and tax has to be levied accordingly. Sec. 161(1) makes no distinction between business income of trust and any other income of trust. Hence, all kinds of income of trust have to be assessed under s. 161 and held that trustees cannot be assessed as AOP . From ratio of decisions (supra) it is clear that determination of status of assessee trust as person in accordance with s. 2(31) of IT Act, 1961 is prerequisite before coming to conclusion whether assessee has committed default under s. 194A of IT Act, 1961. Further, from ratio of decisions (supra) it is clear that status of assessee trust is that of individual. As per relevant provision of s. 194A(1) any person in status of individual is not liable to deduct tax at source for paying to resident any income by way of interest while crediting such income to account of payee. From discussion hereinabove it is evident that assessee-trust as individual was not duty bound to deduct any income-tax at source as per provisions of s. 194A(1) and, therefore, assessee trust cannot be held to be in default under s. 194A of IT Act, 1961. demands raised under s. 201 and 201(1A) for financial years 2001-02 to 2004-05 by AO and sustained by CIT(A) are, therefore, liable to be cancelled and same are cancelled accordingly. Consequently, orders of tax authorities below in making/sustaining impugned demands under s. 201 and 201(1A) of IT Act, 1961 r/w s. 194A of IT Act, 1961 are set aside and grounds of appeals taken by assessee are allowed. In result instant 4 appeals filed by assessee are allowed. *** FOOD CORPN. OF INDIA v. INCOME TAX OFFICER