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CMA Final · Direct Tax Laws and International Taxation · Collection, Recovery and Refund of Tax

Under the Income-tax Act, 2025, a Tax Recovery Officer who has drawn up a recovery certificate finds that he cannot recover the full amount by selling the assessee's property in his own jurisdiction, and the assessee has property elsewhere. Which action does section 414 permit?

The officer may send the certificate, or a certified copy specifying the amount to be recovered if only part remains, to the Tax Recovery Officer where the assessee resides or where his property is situated. That officer then recovers the amount as if he had drawn up the certificate himself.

  1. AHe may send the certificate, or a certified copy specifying the amount still to be recovered, to the Tax Recovery Officer in whose jurisdiction the assessee resides or the property is situatedCorrect
  2. BHe must close the proceedings and refer the shortfall to the Assessing Officer for fresh assessment
  3. CHe may send the certificate only to the Tax Recovery Officer within whose jurisdiction the assessee carries on business
  4. DHe may recover the balance from property in other jurisdictions only after obtaining the Board's approval for each sale

Explanation

Section 414(2) allows the certificate, or a certified copy specifying the amount to be recovered where only part remains, to be sent to a Tax Recovery Officer under section 414(1)(b), i.e. where the assessee resides or the property is situated. That officer then proceeds as if he had drawn up the certificate. The option limiting transfer to the business jurisdiction contradicts clause (1)(b).

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