Income Tax Act

Official PDF pages 516–520

SOURCE PDF PAGE 516
Certificate by Tax Recovery Officer and validity thereof.
413.   (1) When an assessee is in default or is deemed to be in default in making a
payment of tax, the Tax Recovery Officer may draw up under his signature
a statement in such form as may be prescribed specifying the amount of arrears
due from the assessee (such statement being herein and in sections 414 to 416
referred to as certificate) and shall proceed to recover from such assessee the amount
specified in the certificate by one or more of the modes mentioned below, as per
the rules prescribed in this regard,—
( a )   attachment and sale of movable property of the assessee;
( b )   attachment and sale of immovable property of the assessee;
98
[ ( c )   appointing a receiver for the management of movable and immovable
properties of the assessee. ]
(2) The Tax Recovery Officer may take action under sub-section (1), whether or not
proceedings for recovery of the arrears by any other mode have been taken.
(3) The assessee shall not be entitled to dispute the correctness of any certificate
drawn up by the Tax Recovery Officer on any ground.
(4) The Tax Recovery Officer may cancel the certificate if, for any reason, he
considers it necessary so to do, or may correct any clerical or arithmetical mistake
therein.
(5) For the purposes of this section, the movable or immovable property of the
assessee shall include any property—
( a )   which has been transferred, directly or indirectly on or after the 1st June,
1973, by the assessee to his spouse or minor child or son’s wife or son’s
minor child, otherwise than for adequate consideration, and which is
held by, or stands in the name of, any of the said persons; and
( b )   so far as the movable or immovable property so transferred to his minor
child or his son’s minor child is concerned, it shall, even after the date
of attainment of majority by such minor child or son’s minor child, as
the case may be, continue to be included in the movable or immovable
property of the assessee for recovering any arrears due from the assessee
in respect of any period prior to such date.
Tax Recovery Officer by whom recovery is to be effected.
414.   (1) For the purposes of section 413, the Tax Recovery Officer shall be—
( a )   the Tax Recovery Officer within whose jurisdiction the assessee carries
on his business or profession or has the principal place of his business
or profession; or
98.   Clause ( c ) substituted for clauses ( c ) and ( d ) by the Finance Act, 2026, w.e.f.   1-4-2026 . Prior
to their substitution, clauses ( c ) and ( d ) read as under :
“( c )   arrest of the assessee and his detention in prison;
( d )   appointing a receiver for the management of movable and immovable properties of
the assessee.”

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SOURCE PDF PAGE 517
( b )   the Tax Recovery Officer within whose jurisdiction the assessee resides
or any of his movable or immovable property is situated,
the jurisdiction for this purpose being the jurisdiction assigned to the Tax Recovery
Officer under the orders or directions issued by the Board, or by any income-tax
authority not below the rank of Commissioner who is authorised in this behalf by
the Board in pursuance of section 241.
(2)   Where an assessee has property within the jurisdiction of more than one Tax
Recovery Officer and the Tax Recovery Officer by whom the certificate is drawn up—
( a )   is not able to recover the entire amount by sale of the property, movable
or immovable, within his jurisdiction; or
( b )   is of the opinion that, for the purpose of expediting or securing the
recovery of the whole or any part of the amount under this Part, it is
necessary so to do,
he may send—
( i )   the certificate; or
( ii )   a copy of the certificate certified in the manner as may be prescribed and
specifying the amount to be recovered, where only a part of the amount
is to be recovered,
to a Tax Recovery Officer referred to in sub-section (1)( b ) and, thereupon, such
officer shall also proceed to recover the amount under this Part as if the certificate
or copy thereof had been drawn up by him.
Stay of proceedings in pursuance of certificate and amendment or cancella-
tion thereof.
415.   (1) The Tax Recovery Officer may grant time for the payment of any tax and,
till the expiry of such time, shall stay the recovery proceedings for such tax.
(2) Where a certificate has been drawn up and subsequently, the amount of the
outstanding demand is reduced
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as a result of the order giving rise to the said
demand, being modified in an appeal or other proceeding under this Act, the Tax
Recovery Officer shall—
( a )   if the order is the subject-matter of further proceeding under this Act,
stay the recovery of such part of the amount specified in the certificate
as pertains to the said reduction for the period for which the appeal or
other proceeding remains pending; or
( b )   if the order which was the subject-matter of such appeal or other pro -
ceeding has become final and conclusive, amend the certificate, or cancel
it.
Other modes of recovery.
416.   (1)   Where   no   certificate   has   been   drawn   up   under   section   413,   the
Assessing Officer may recover the tax by any one or more of the modes pro -
vided in this section.

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SOURCE PDF PAGE 518
(2) Where a certificate has been drawn up under section 413, the Tax Recovery
Officer may, without prejudice to the modes of recovery specified in that section,
recover the tax by any one or more of the modes provided in this section.
(3) If any assessee is in receipt of any income chargeable under the head “Salaries”,
the Assessing Officer or Tax Recovery Officer may require any person paying the
same to deduct from any payment subsequent to the date of such requisition any
arrears of tax due from such assessee and such person shall comply with the said
requisition and shall pay the sum so deducted to the credit of the Central Govern -
ment or as the Board directs.
(4) Nothing contained in sub-section (3) shall apply to any part of the salary
exempted from attachment in execution of a decree of a civil court under section
60 of the Code of Civil Procedure, 1908 (5 of 1908).
(5) ( a ) The Assessing Officer or Tax Recovery Officer may, at any time or from time
to time, by notice in writing require any person—
( I )   from whom money is due or may become due to the assessee; or
( II )   who holds or may subsequently hold money for or on account of the
assessee,
to pay to the Assessing Officer or Tax Recovery Officer—
( i )   either forthwith upon the money becoming due or being held; or
( ii )   at or within the time specified in the notice (not being before the money
becomes due or is held),
so much of the money as is sufficient to pay the amount due by the assessee in
respect of arrears or the whole of the money when it is equal to or less than that
amount.
( b ) A notice under this sub-section may be issued to any person who holds or may
subsequently hold any money for or on account of the assessee jointly with any
other person.
( c ) For the purposes of this sub-section, the shares of the joint holders in the account,
as referred in clause ( b ), shall be presumed, until the contrary is proved, to be equal.
( d ) A copy of the notice under this sub-section shall be forwarded to—
( i )   the assessee; and
( ii )   in the case of a joint account to all the joint holders,
at his or their last addresses known to the Assessing Officer or Tax Recovery Officer.
( e ) Save as otherwise provided in this sub-section, every person to whom a notice
is issued under that sub-section shall be bound to comply with such notice, and,
in particular, where any such notice is issued to a post office, banking company
or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or
any other document to be produced for the purpose of any entry, endorsement or
the like being made before payment is made, irrespective of any rule, practice or
requirement to the contrary.
( f ) Any claim respecting any property in relation to which a notice under this sub-sec -
tion has been issued arising after the date of the notice shall be void as against any
demand contained in the notice.

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SOURCE PDF PAGE 519
( g ) Where a person, to whom a notice under this sub-section is issued, objects to it
by a statement on oath that—
( a )   the sum demanded or any part thereof is not due to the assessee; or
( b )   he does not hold any money for or on account of the assessee,
then nothing contained in that sub-section shall be deemed to require such person
to pay any such sum or part thereof.
( h ) Where it is discovered that the statement given by a person under clause ( g )
was false in any material particular, such person shall be personally liable to the
Assessing Officer or Tax Recovery Officer to the extent of his own liability to the
assessee on the date of the notice, or to the extent of the assessee’s liability for any
sum due under this Act, whichever is less.
( i ) The Assessing Officer or Tax Recovery Officer may, at any time or from time to
time, amend or revoke any notice issued under this sub-section or extend the time
for making any payment in pursuance of a notice issued under the said sub-section.
( j ) The Assessing Officer or Tax Recovery Officer shall grant a receipt for any amount
paid in compliance with a notice issued under this sub-section, and the person so
paying shall be fully discharged from his liability to the assessee to the extent of
the amount so paid.
( k ) Any person discharging any liability to the assessee after receipt of a notice
under this sub-section shall be personally liable to the Assessing Officer or the Tax
Recovery Officer—
( i )   to the extent of his own liability to the assessee so discharged; or
( ii )   to the extent of the assessee’s liability for any sum due under this Act,
whichever is less.
( l ) If the person to whom a notice under this sub-section is issued fails to make
payment in pursuance thereof to the Assessing Officer or Tax Recovery Officer,—
( i )   he shall be deemed to be an assessee in default in respect of the amount
specified in the notice and further proceedings may be taken against him
for the realisation of the amount as if it were an arrear of tax due from
him, in the manner provided in sections 413 to 415; and
( ii )   the notice shall have the same effect as an attachment of a debt by the
Tax Recovery Officer in exercise of his powers under section 413.
(6) The Assessing Officer or Tax Recovery Officer may apply to the court in whose
custody there is money belonging to the assessee—
( a )   for payment to him of the entire amount of such money; or
( b )   if it is more than the tax due, an amount sufficient to discharge the tax.
(7) The Assessing Officer or Tax Recovery Officer may, if so authorised by an in -
come-tax authority not below the rank of Commissioner by general or special order,
recover any arrears of tax due from an assessee by distraint and sale of his movable
property in the manner as may be prescribed.

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SOURCE PDF PAGE 520
Recovery through State Government.
417.   If   the   recovery   of   tax   in   any   area   has   been   entrusted   to   a   State
Government under article 258(1) of the Constitution, the State Government
may direct, with respect to that area or any part thereof that tax shall be recovered
therein with, and as an addition to, any municipal tax or local rate, by the same
person and in the same manner as the municipal tax or local rate is recovered.
Recovery of tax in pursuance of agreements with foreign countries.
418.   (1) Where an agreement is entered into by the Central Government with the
Government of any country outside India for recovery of income-tax under
this Act and the corresponding law in force in that country and the Government
of that country or any authority under that Government which is specified in this
behalf in such agreement sends to the Board a certificate for the recovery of any
tax due under such corresponding law from—
( a )   a resident; or
( b )   a person having any property in India,
the Board may forward such certificate to any Tax Recovery Officer having juris -
diction over the resident, or within whose jurisdiction such property is situated and
thereupon such Tax Recovery Officer shall—
( i )   proceed to recover the amount specified in the certificate in the manner
in which he would proceed to recover the amount specified in a certificate
drawn up by him under section 413; and
( ii )   remit any sum so recovered by him to the Board after deducting his
expenses in connection with the recovery proceedings.
(2) Where an assessee who is in default or is deemed to be in default in making a
payment of tax,—
( a )   is a resident of a country being a country with which the Central
Government has entered into an agreement for the recovery of income-
tax under this Act and the corresponding law in force in that country; or
( b )   has any property in the country referred to in clause ( a ) ,
then, Tax Recovery Officer may forward to the Board a certificate drawn up by
him under section 413 and the Board may take such action thereon as it may deem
appropriate having regard to the terms of the agreement with such country.
Recovery of penalties, fine, interest and other sums.
419.   Any sum imposed by way of interest, fine, penalty, or any other sum payable
under the provisions of this Act, shall be recoverable in the manner provided
in this Part for the recovery of arrears of tax.
Tax clearance certificate.
420.   (1)   Subject   to   such   exceptions   as   the   Central   Government   may,   by
notification, specify in this behalf, no person,—
( a )   who is not domiciled in India;