Deduction / Payment of Tax Chapter- 23
No step in execution of the notice as per rule 123 shall be taken until the period specified in the said
notice has elapsed.
If the Commissioner Inland Revenue is satisfied that the defaulter is to cancel, remove or dispose of
the whole or any part of such of his moveable property as would be liable to attachment in execution
of a notice that the realization of the amount of notice would in consequence be delayed or
obstructed, he may at any time after the issue of the notice under rule direct, for reasons to be
recorded in writing, an attachment of the whole or part of such property:
If the defaulter whose property has been so attached furnishes security to the satisfaction of the
Commissioner Inland Revenue, such attachment shall be cancelled from the date on which such
security is accepted by the Commissioner Inland Revenue.- Recovery of tax by district officer (revenue) [Section 138A]
The Commissioner Inland Revenue may forward to the District Officer (Revenue) of the district in
which the taxpayer resides or carries on business or in which any property belonging to the taxpayer
is situated, a certificate specifying the amount of any tax due from the taxpayer and on receipt of such
certificate, the recovery of tax from the taxpayer shall be made as, it were an arrear of land revenue.- Bankruptcy [Section 138B]
If a taxpayer is declared bankrupt, the tax liability shall pass on to the estate in bankruptcy. If tax
liability is incurred by an estate in bankruptcy, the tax shall be deemed to be a current expenditure in
the operations of the estate in bankruptcy and shall be paid before the claims preferred by other
creditors are settled.- Collection of tax in the case of private companies and associations of persons [Section 139]
Where any tax payable by a private company in respect of any tax year cannot be recovered from
the company, every person who was, at any time in that tax year -
(a) a director of the company, other than an employed director, or
(b) a shareholder in the company owning not less than 10% of the paid-up capital of
the company,
Shall be jointly and severally liable for payment of the tax due from the company,
Any director who pays tax as above shall be entitled to recover the tax paid from the company or a
share of the tax from any other director. Similarly a shareholder who pays tax shall be entitled to
recover the tax paid from the company or from any other shareholder that has 10% holding of the
paid up of the company in that proportion.
Where any tax payable by a member of an AOP in respect of the member's share of the income of
the AOP in respect of any tax year cannot be recovered from the member, the AOP shall be liable
for the tax due by the member.
Notwithstanding anything contained in any other law, for the time being in force, where any tax
payable by an association of persons in respect of any tax year cannot be recovered from the AOP,
every person who was, at any time in that tax year, a member of the AOP, shall be jointly and
severally liable for payment of the tax due by the association of persons.
Any member who pays tax on behalf of other persons shall be entitled to recover the tax paid from
the AOP or a share of the tax from any other member.- Recovery of tax from persons holding money on behalf of a taxpayer [Section 140]
(1) For the purpose of recovering any tax due by a taxpayer, the Commissioner may, by notice, in
writing, require any person –
(a) owing or who may owe money to the taxpayer; or
(b) holding or who may hold money for, or on account of the taxpayer;
(c) holding or who may hold money on account of some other person for payment to the
taxpayer; or
(d) having authority of some other person to pay money to the taxpayer,