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Collection. Recovery and Refund

1) The document discusses various provisions related to tax collection and recovery under the Income Tax Act, including demand notices, interest on delayed payments, penalties for tax defaults, and the powers of tax recovery officers. 2) It explains that the principal chief commissioner may waive or reduce interest charges if payment delay was due to genuine hardship or circumstances beyond the taxpayer's control. 3) When tax remains unpaid after the due date, the taxpayer is deemed to be in default and liable to pay the arrears amount, interest, and penalties as directed by the assessing officer.

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Dharshini Aravamudhan
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227 views25 pages

Collection. Recovery and Refund

1) The document discusses various provisions related to tax collection and recovery under the Income Tax Act, including demand notices, interest on delayed payments, penalties for tax defaults, and the powers of tax recovery officers. 2) It explains that the principal chief commissioner may waive or reduce interest charges if payment delay was due to genuine hardship or circumstances beyond the taxpayer's control. 3) When tax remains unpaid after the due date, the taxpayer is deemed to be in default and liable to pay the arrears amount, interest, and penalties as directed by the assessing officer.

Uploaded by

Dharshini Aravamudhan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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SRINIVASA ACADEMY

(An Academy of Professionals for CA / ICWA / CS)


COLLECTION AND RECOVERY
DEMAND NOTICE

Extension of time
Time limit for
limit
payment of tax
Decided by the
<30 days
Assessing officer

Interest on delay in
payment
1% for every month
of delay
WAIVER OR REDUCTION OF INTEREST
[SEC.220(2A)]
The Principal Chief Commissioner/Chief Commissioner or Principal
Commissioner/Commissioner may reduce or waive the amount of
interest if:

payment of such amount has default in the payment due to


caused or would cause genuine circumstances beyond the
hardship to the assessee control of the assessee

the assessee has co-operated in


any inquiry/proceeding for the
recovery of any amount due
from him.
ASSESSEE IN DEFAULT [SEC.220(4)]

If the amount is not paid within the time (or extended time) at the
place and to the person mentioned in the said notice the assessee
shall be deemed to be in default.

Exception:
Assessee has presented an appeal u/s 246
If income arising outside India and their laws prohibit or
restrict the remittance of money to India
PENALTY PAYABLE WHEN TAX IN
DEFAULT [Sec. 221]
Assessee in default/deemed to

Arrears amount
be in default

Interest

As directed by
Penalty
Assessing officer

Note:
Total amount of penalty < the amount of tax in arrears
CERTIFICATE TO TAX RECOVERY
OFFICER [Sec. 222]

The Tax Recovery Officer may draw up under his


signature a statement in Form 57 specifying the amount
of arrears due from the assesse
Tax Recovery Officer may recover the amount specified
in the certificate through:
 attachment and sale of the assessee’s movable property
 attachment and sale of the assessee’s immovable
property
 arrest of the assessee and his detention in prison
 appointing a receiver for the management of the
assessee’s movable and immovable properties
TAX RECOVERY OFFICER BY WHOM
RECOVERY IS TO BE EFFECTED [See. 223]

The Tax Recovery Officer competent to take action


if:

Under his jurisdiction the assessee carries on


his business/profession or principal place of his
business/profession is situated

Under his jurisdiction the assessee resides or


any movable or immovable property of the
assessee is situated
STAY OF PROCEEDINGS [Sec. 225]
Tax Recovery Officer grants time for the
payment of any tax
The certificate drawn up is modified in appeal
or proceedings
OTHER MODES OF RECOVERY
[Sec. 226]

Attachment of salary Garnishee order

Recovery through
state government
TAX CLEARANCE CERTIFICATE [Sec. 230]
Person not domiciled in India

Came to India in connection with business, profession or employment


Have income derived from any source in India

To the prescribed authority:


An undertaking in [form 30A] from his employer
Through whom such person is in receipt of the income

Tax payable by such person who is not domiciled in India shall be paid by the
employer or the payer

No objection certificate [form 30B], for leaving India


TAX CLEARANCE CERTIFICATE [Sec. 230]

Person domiciled in India

At the time of departure from India, should furnish in Form 30C

(a) The permanent account number


(b) The purpose of his visit outside India
(c) The estimated period of his stay outside India

A certificate from the income-tax authority stating that he has no liabilities


AUTHENTICATION OF NOTICES AND
OTHER DOCUMENTS [Sec. 282A]

Notice or other
Signed and issued in
document to be
paper form
issued by any
/electronic form
income-tax authority

If the name and office


of a designated
Notice shall be deemed
income-tax authority is
to be authenticated
printed, stamped or
otherwise written
NOTICE DEEMED TO BE VALID IN
CERTAIN CIRCUMSTANCES [Sec. 292BB]

If an assessee
appeared in any It shall be deemed that any
proceeding/inquiry notice required to be
relating to an served has been duly
assessment or served upon him in time
reassessment

Such assessee cannot say that the notice was:


 not served upon him
 not served upon him in time
 served upon him in an improper manner
REFUND
Meaning (Sec.237)
Where the tax paid by the assessee is in excess
of his tax liability, then such assessee shall be
entitled to receive back such excess amount,
called refund.

Self
Advance tax TDS TCS Assessment
tax

Tax paid on
demand
Who can claim Refund?
Income of one person
Person paid tax more included in total
than the amount income of other person,
chargeable can claim refund on tax
paid on such income

his legal representative,


In case of death, trustee, guardian or
incapacity, insolvency, receiver, as the case
liquidation of a person may be, can claim and
receive such
REFUND ON APPEAL, etc.
[Sec. 240]
Any refund becomes due as a result of any order passed
in appeal or other proceedings, the Assessing Officer
shall refund the amount to the assessee suomoto.

Assessment is set • Refund due on completion of fresh


aside/cancelled and an order assessment.
of fresh assessment is • Amount of refund decided as per the fresh
directed to be made assessment.

• refund shall become due when such


assessment is annulled
The assessment is annulled • refund shall be only of the amount of the
tax paid in excess of tax as per return
SET-OFF OF REFUND AGAINST TAX
REMAINING PAYABLE [Sec. 245]
If a refund is due to an assessee, it can be set-off against
the sum payable under this Act by issuing a written
intimation to the assessee by tax authorities

Refund • Tax of another year


cannot be • Arrear tax
set-off • against demand outstanding
against from any other assessee
WITHHOLDING OF REFUND IN
CERTAIN CASES [Sec. 241A]
The Assessing Officer may withhold the refund due to
the assessee u/s 143(1) up to the date on which the
assessment u/s 143(3) is made if:

A notice has been issued u/s


Refund of any amount becomes 143(2) [i.e., notice for scrutiny
due to the assessee u/s 143(1) assessment u/s 143(3)] in
respect of such return

The grant of the refund is likely


to adversely affect the revenue
OBJECTIVES

1.The time limit for payment of tax should be


less than ______ days
a) 30
b) 45
c) 60
d) None of the above
Answer – a) 30 days
OBJECTIVES

2.Interest on delay in payment is ____ on every


___ of delay.
a) 1%, month
b) 2%, month
c) 5%, month
d) 10%, year
Answer – a) 1%, month
OBJECTIVES

3.When tax payable is in default, the assessing


officer will direct us to pay
a) Penalty
b) Interest
c) Arrear Amount
d) All the above
Answer – d) All the above

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