49.  Arrears Of Tax And Recovery Thereof

Any amount, otherwise than by way of advance tax specified as payable in a notice of demand under Section 156 shall be paid within 30 days of the service of the notice at the place and to the person mentioned in the notice. However, if the AO believes that it is detrimental to the revenue to allow the full period of 30 days he may, with the previous approval of the DC, ask the assessee to pay the demand within such less period as may be specified by him in the notice of demand. If the demand is not paid within the time mentioned above, the assessee shall be liable to pay simple interest at 1 % p.m. However, the AO may extend the time of payment, if an application is received before the expiry of such period. The Board may also reduce or waive the interest in suitable cases.

If the assessee does not pay the demand within the extended period he shall be deemed to be an assessee in default. In such a case, the assessee shall further be liable to a penalty which may be increased from time to time so, however, the total amount of penalty does not exceed the amount of tax in arrears under Section 221.


When an assessee is in default or is deemed to be in default in making a payment of tax the AO may forward to the Tax Recovery Officer a certificate under his signature specifying the amount of arrears due from the assessee and the Tax Recovery Officer on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein by one or more of the modes mentioned below, in accordance with the detailed rules laid down in the Second Schedule to the Act.:

 

(a)     attachment and sale of the assessee’s movable or immovable property;


(b)     arrest of assessee and his detention in prison;

 

(c)     appointing a receiver for the management of the assessee’s movable and immovable properties.


The Tax Recovery Officer (TRO) is now empowered to start recovery proceedings on his ownself.

 

Notwithstanding the recovery proceedings under Section 222, the AO may recover the tax due


(a)     from such assessee from his ‘Salary’;

 

(b)     requiring any of the debtors of assessee to pay to the AO such sums as he may require towards arrears of tax;

 

(c)     applying to the court in whose custody there is money belonging to the assessee for payment to him of the entire amount sufficient to discharge the tax; or

 

(d)     by distraint and dale of movable property if duly authorised by the Commissioner or Chief CIT


The Income Tax Appellate Tribunal can grant stay of tax only upto a maximum period of 180 days by which date the appeal is to be disposed of.
 
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