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CS Executive · Tax Laws and Practice · Procedural Compliance under Income Tax

Under section 305 of the Income-tax Act, 2025, a representative assessee who apprehends tax liability and disagrees with the principal about the amount to be retained may:

In case of disagreement with the principal, the representative assessee may obtain from the Assessing Officer a certificate stating the amount to be retained pending final settlement. That certificate acts as his warrant, and recovery at settlement is capped at that amount, barring additional assets of the principal.

  1. Aretain whatever amount he considers fair without any document
  2. Bsecure from the Assessing Officer a certificate stating the amount to be retained pending final settlement, which is his warrant for retaining itCorrect
  3. Capproach the Tribunal for a certificate of retention
  4. Drecover the amount only after the principal's consent is recorded

Explanation

Section 305(3) lets the representative assessee obtain from the Assessing Officer a certificate stating the amount to be retained, which serves as his warrant. Under sub-section (4), the amount recoverable at final settlement cannot exceed the certificate amount, except to the extent of additional assets of the principal in his hands.

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