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CMA Final · Direct Tax Laws and International Taxation · Black Money Act, 2015

Mr. Raghav has a tax arrear under the Black Money Act. His employer, Kaveri Textiles Ltd, receives a requisition from the Assessing Officer under section 32(1). Which statement follows from section 32?

The employer must comply with the requisition and deduct enough from payments to the assessee to meet the tax arrear, and pay it to the Central Government. However, any part of salary exempt from attachment under section 60 of the Code of Civil Procedure is exempt from the requisition.

  1. AThe employer may deduct the sum even from salary exempt from attachment under section 60 of the Code of Civil Procedure, 1908
  2. BThe employer must deduct from payments to the assessee an amount sufficient to meet the arrear, but salary exempt from attachment under section 60 of the Code of Civil Procedure, 1908 is exempt from the requisitionCorrect
  3. CThe requisition is valid only if the employer first obtains a court decree
  4. DThe employer is free to ignore the requisition if the assessee objects

Explanation

Section 32(1) lets the AO or TRO require the employer to deduct an amount sufficient to meet the arrear, and 32(2) obliges compliance. Section 32(3) exempts salary that is exempt from attachment under section 60 of the CPC. The first option ignores that exemption.

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