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

Under section 32 of the Black Money Act, a notice is issued to a bank under sub-section (4) to pay Rs 8,00,000 of the assessee's tax arrear out of the assessee's deposit. The bank holds only Rs 5,00,000 for the assessee. Which statement follows from the section?

The bank need not pay the part that is not due to the assessee, since sub-section (9) allows objection by a statement on oath that the sum is not due or no money is held. The notice can only reach the debt, not the full demand. A passbook need not be produced.

  1. AThe bank must pay Rs 8,00,000 because the notice states that amount
  2. BThe bank is not required to pay the amount demanded to the extent it objects by a statement on oath that the sum is not due to the assessee or that it holds no money for the assesseeCorrect
  3. CThe bank may ignore the notice unless the passbook is produced for endorsement
  4. DThe bank must pay the amount only after the assessee consents in writing

Explanation

Under section 32(4) the debtor pays an amount not exceeding the debt. Under sub-section (9), the debtor need not pay the amount, or part of it, if it objects by a statement on oath that the sum is not due or no money is held. Sub-section (7) says production of a passbook is not necessary, so that option is wrong.

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