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Report No. 12

The Second Schedule

Procedure for Recovery of Tax

[See section 231(1)]

Part I

General Provisions

1. Definitions.-

In this Schedule, unless the context otherwise requires,-

(a) "certificate" means a certificate received by the Collector from the Income-tax Officer for the recovery of arrears under this Schedule;

(b) "defaulter" means the assessee mention in the certificate;

(c) "execution", in relation to a certificate, means recovery of arrears in pursuance of the certificate;

(d) "movable property" includes growing crops;

(e) "officer" means an officer authorised to make an attachment or sale under this Schedule; and

(f) "rule" means a rule contained in this Schedule.

[Section 3(4), Bengal Public Demands Recovery Act, 1913 (Bengal Act 3 of 1913)12

2. Issue of notice.-

When a certificate has been received by the Collector from the Income-tax Officer for the recovery of arrears under this Schedule, the Collector shall cause to be served upon the defaulter a notice requiring to defaulter to pay the amount specified in the certificate within fifteen days from the date of service of the notice and intimating that in default steps would be taken to realise the amount under this Schedule.

[Section 7, Bengal Act]

3. When certificate may be executed.-

No step in execution of a certificate shall be taken until the period of fifteen days has elapsed since the date of the service of the notice required by the preceding rule:

Provided that, if the Collector is satisfied that the defaulter is likely to conceal, remove or dispose of the whole or any part of such of his movable property as would be liable to attachment in execution of a decree of a civil court, and that the realisation of the amount of the certificate would in consequence be delayed or obstructed, he may at any time direct, for reasons to be recorded in writing, an attachment of the whole or any part of such property:

Provided further that if the defaulter whose property has been so attached furnishes security to the satisfaction of the Collector, such attachment shall be cancelled from the date on which such security is accepted by the Collector.

[Section 13, Bengal Act]

4. Mode of recovery -

If the amount mentioned in the notice as not paid within the time specified therein or within such further time as the Collector may grant in his discretion, the Collector shall proceed to realise the amount by one or more of the following modes :-

(a) by attachment and sale of the movable property of the defaulter;

(b) by attachment and sale of the immovable property of the defaulter;

(c) by appointing a receiver of the property belonging to the defaulter;

(d) by arrest and detention of the defaulter in civil prison.

[Section 5 of the Madras Revenue Recovery Act, 1864 (2 of 1864).

[Section 14, Bengal Act] (Section 150, The Bombay Revenue Code, 1879 (5 of 1879)12

5. Interest, costs and charges recoverable.-

There shall be recoverable, in the proceedings in execution of every certificate,-

(a) such interest upon the tax to which the certificate relates as is payable under this Act, and

(b) all charges incurred in respect of-

(i) the service of notice upon the defaulter to pay the arrears, and of warrants and other processes, and

(ii) all other proceedings taken for realising the arrears.

[Section 16, Bengal Act]

6. Purchaser's title.-

(1) Where property is sold in execution of a certificate, there shall vest in the purchaser merely the right, title and interest of the defaulter at the time of the sale, even though the property itself be specified.

[Section 20(1), Bengal Act]

(2) Where immovable property is sold in execution of a certificate, and such sale has become absolute, the purchaser's right, title and interest shall be deemed to have vested in him from the time when the property is sold, and not from the time when the sale becomes absolute.

[Section 20(2), Bengal Act]

7. Suit against purchaser not maintainable on ground of purchase being made on behalf of plaintiff.-

(1) No suit shall be maintained against any person claiming title under a purchase certified by the Collector in the manner laid down in this Schedule, on the ground that the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims.

(2) Nothing in this section shall bar a suit to obtain a declaration that the name of any purchaser certified as aforesaid was inserted in the certificate fraudulently or without the consent of the real purchaser, or interfere with the right of a third person to proceed against that property, though ostensibly sold to the certified purchaser, on the ground that it is liable to satisfy a claim of such third person against the real owner.

[Section 21, Bengal Act]

8. Disposal of proceeds of execution.-

(1) Whenever assets are realised, by sale or otherwise in execution of a certificate, they shall be disposed of in the following manner:-

(a) there shall first be paid to the Income-tax Officer the costs incurred by him;

(b) there shall, in the next place, be paid to the Income-tax Officer the amount due under the certificate in execution of which the assets were realized;

(c) if there remains a balance after these sums have been paid, there shall be paid to the Income-tax Officer therefrom any other amount recoverable under the procedure provided by this Act which may be due upon the date upon which the assets were realized; and

(d) the balance (if any) remaining after the payment of the amount (if any) referred to in clause (c) shall be paid to the defaulter.

(2) If the defaulter disputes any claim made by the Income-tax Officer to receive any amount referred to in clause (c), the Collector shall determine the dispute.

[Section 26, Bengal Act]

9. General bar to jurisdiction of Civil Courts, save where fraud alleged.-

Except as otherwise expressly provided in this Act, every question arising between the Income-tax Officer and the defaulter, or their representatives, relating to the execution, discharge or satisfaction of a certificate duly filed under this Act, or relating to the confirmation or setting aside by an order under this Act of a sale held in execution of such certificate, shall be determined, not by suit, but by order of the Collector before whom such question arises:

Provided that a suit may be brought in a civil court in respect of any such question upon the ground of fraud.

[Section 37, Bengal Act]

10. Property exempt from attachment.-

(1) All such property as is by the Code of Civil Procedure, 1908 (5 of 1908), exempted from attachment and sale in execution of a decree of a civil court shall be exempt from attachment and sale under this Schedule.

(2) The Collector's decision as to what property is so entitled to exemption shall be conclusive.

[Section 17, Bengal Act] [Section 156, Bombay Act]

11. Investigation by Collector.-

(1) Where any claim is preferred to, or any objection is made to the attachment or sale of, any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the Collector shall proceed to investigate the claim or objection:

Provided that no such investigation shall be made where the Collector considers that the claim or objection was designedly or unnecessarily delayed.

(2) Where the property to which the claim or objection applies has been advertised for sale, the Collector ordering the sale may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as the Collector shall deem fit.

[Rule 39, Sch. II, Bengal Act]

(3) The claimant or objector must adduce evidence to show that-

(a) (in the case of immovable property) at the date of the service of the notice issued under this Schedule to pay the arrears, or

(b) (in the case of movable property) at the date of the attachment he had some interest in, or was possessed of, the property in question. (Rule 40, Sch. II, Bengal Actl

(4) Where, upon the said investigation, the Collector is satisfied that, for the reason stated in the claim or objection, such property was not, at the said date, in the possession of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person; or partly on his own account and partly on account of some other person, the Collector shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale.

[Rule 41, Sch. II Bengal Act]

(5) Where the Collector is satisfied that the property was, at the said date, in the possession of the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the Collector shall disallow the claim.

[Rule 42, Sch. II Bengal Act]

(6) Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a civil court to establish the right which he claims to the property in dispute; but, subject to the result of such suit (if any), the order of the Collector shall be Conclusive.

[Rule 43, Sch. II Bengal Act]

12. Removal of attachment on satisfaction or cancellation of certificate.-


(a) the amount due, with costs and all charges and expenses resulting from the attachment of any property or incurred in order to hold a sale, are paid to the Collector, or

(b) the certificate is cancelled,

the attachment shall be deemed to be withdrawn and, in the case of immovable property, the withdrawal shall, if the defaulter so desires, be proclaimed at his expense, and a copy of the proclamation shall be affixed in the manner provided by this Schedule for a proclamation of sale of immovable property.

[Rule 24, Sch. II Bengal Act]

13. Officer entitled to attach and sell.-

The attachment and sale of movable property and the attachment and sale of immovable property may be made by such officers or class of officers as the Collector may from time to time direct.

[Section 154, latter part, Bombay Act]

14. Defaulting purchaser answerable for loss on resale.-

Any deficiency of price which may happen on a re-sale by reason of the purchaser's default, and all expenses attending such re-sale, shall be certified to the Collector by the officer holding the sale, and shall, at the instance of either the Income-tax Officer or the defaulter, be recoverable from the defaulting purchaser under the procedure provided by this Schedule:

Provided that no such application shall be entertained unless filed within fifteen days from the date of re-sale.

[Rule 51, Sch. II, Bengal Act]

15. Adjournment or stoppage of sale.-

(1) The Collector may, in his discretion, adjourn any sale hereunder to a specified day and hour; and the officer conducting any such sale may in his discretion adjourn the sale, recording his reasons for such adjournment :

Provided that, where the sale is made in, or within the precincts of, the office of the Collector, no such adjournment shall be made without the leave of the Collector.

(2) Where a sale of immovable property is adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of sale under this Schedule shall be made unless the defaulter consents to waive it.

(3) Every sale shall be stopped if, before the lot is knocked down, the arrears and costs (including the costs of the sale) are tendered to the officer conducting the sale, or proof is given to his satisfaction that the amount of such arrears and costs has been paid to the Collector who ordered the sale.

[Rule 50, Sch. II Bengal Act]

16. Private alienation of property after attachment to be void.-

Where an attachment has been made under this Schedule, any private transfer or delivery of the property attached or of any interest therein and any payment to the defaulter of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment.

[Section 64, C.P.C.] (Section 18, Bengal Act]

17. Prohibition against bidding or purchase by officer.-

No officer or other person having any duty to perform in connection with any sale under this Schedule shall, either directly or indirectly, bid for, acquire or attempt to acquire any interest in the property sold.

[Rule 52, Sch. II Bengal Act]

18. Prohibition against sale on holidays.-

No sale under this Schedule shall take place on Sunday or other general holiday recognised by the State Government or on any day which has been notified by the State Government to be a local holiday for the area in which the sale is to take place.

[Section 167, Bombay Act]

19. Assistance by police.-

Any officer authorised to attach or sell any property or to arrest the defaulter or charged with any duty to be performed under this Schedule, may apply to the officer-in-charge of the nearest police station for such assistance as may be necessary for preventing obstruction to such officer in the discharge of his duties, the authority to whom such application is made shall depute a sufficient number of police officers for furnishing such assistance.

Income-Tax Act, 1922 Back

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