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Report No. 12

Notes to clause 231

Existing section 46(2) provides that the Income-tax Officer may forward to the Collector a certificate of arrears and the Collector shall then proceed to recover the amount "as if it were an arrears of land revenue". Since the law relating to recovery of land revenue varies from State to State, it seems desirable to state the permissible modes of recovery in the Act itself. Sub-clause (1), therefore, enumerates these modes, which are taken from the Code of Civil Procedure.

The proviso to existing section 46(2) lays down that the Collector shall, for such recovery, have the powers of a civil court also. Since the various modes of recovery are being listed in the clause itself, this proviso becomes unnecessary and has not been reproduced in the draft.

Sub-clause (2).- Does not need any comments.

Notes to clause 232

This is new. There are some doubts as to the Collector to whom the Income-tax Officer can send the certificate referred to in section 46(2). The draft clause provides that the Collector within whose jurisdiction the assessee carries on his business etc., or resides or has any property, can be approached.

Sub-clause (2).- Provides for the procedure where the Collector to whom the certificate is initially sent is not able to recover the arrears.

The explanation makes it clear that the Collector of any district in India can be approached (even though the district is situated in other State). (This would avoid the necessity to have recourse to the procedure under the Revenue Recovery Act (1 of 1890). "Additional Collectors" have also been included in the definition of "Collectors" as difficulty was experienced having regard to the provisions of the General Clauses Act defining Collector. That definition, if strictly construed, would not include an Additional Collector.

Notes to clause 233

This is new and is intended to make it clear that the correctness of the assessment shall not be questioned before the Collector. Sub-clause (2) saves the right of the assessee to apply to the Income-tax Officer for withdrawal of the certificate. Sub-clauses (3) and (4) lay down that the Income-tax Officer may correct the certificate, in which case he should inform the Collector.

Notes to clause 234

This is new. The object is (i) to ensure that the Income-tax Officer and the Collector remain in touch with each other and (ii) to lay down the procedure in cases where, after the issue of a certificate, time is granted for payment of tax, or the demand is reduced1.

1. See also drat clause 233(4).

Notes to clause 235

Sub-clause (1).- Does not need any comments.

Sub-clause (2).- The only change made is the addition of a restriction to the effect that salary etc. exempt, from attachment under the Civil Procedure Code will be exempt for this sub-clause also.

Sub-clause (3).- Slight verbal changes have been made in existing section 46(5), for the sake of simplicity and precision.

Existing section 46(5A), 5th paragraph, provides that where the person to whom a notice under this sub-section is sent does not pay amount concerned, further proceedings may be taken "by and before the Collector on the footing that the Income-tax Officer's notice has the same effect as an attachment" etc. This language is not very happy and has been replaced in the draft by a simpler provision to the effect that further proceedings may be taken as if the amounts were an arrears of tax and that the notice shall have the effect as an attachment of debt by the Collector.

Sub-clause (4).- This is new and is intended to enable the Income-tax Officer to apply to a court holding money, belong to the assessee, for payment of the tax due from the assessee.

Sub-clause (5).- Existing section 46(3) contemplates in certain cases the recovery of arrears by the Income-tax Officer by any process authorised by the "municipal law for the recovery of municipal taxes". One of the processes usually found in municipal laws is, distraint and sale of movable property, Sub-clause (5) read with the third Schedule deals with this process. It seems unnecessary to retain any of the other modes of recovery provided for by Municipal Acts.

Notes to clause 236

Does not need any comments.

Notes to clause 237

Does not need any comments.

Notes to clause 238

Does not need any comments.

Notes to clause 239

This clause does not need any comments.

Notes to clause 240

Existing section 47 has been incorporated here. The only addition made is the reference to the provision corresponding to section 18A(9) for the sake of comprehensiveness.

Notes to clause 241

Sub-clauses (1) to (3).- Do not need any comments.

Sub-clauses (4) and (5).- These are new. Since there are many ships or aircraft which carry passengers outside India, it seems desirable to require the owners of the aircraft or ships etc. to furnish a list of the persons who travelled by the ship etc. in the preceding months. In the absence of any such provision it becomes difficult to put into force the provisions of section 46A(2), since the Income-tax authorities have no information in their possession as to the persons who travelled in the ship or air-craft belonging to the person concerned against whom section 46A(2) is directed.

Sub-clause (5).- Provides that the liability enforceable against the owners etc. of such ships etc. will not be enforced after two years of the date on which the list is filed. It gives a concession and will ensure the prompt filing of such list.

Sub-clause (6).- Does not need any comments.

Notes to clause 242

The time limit for commencing recovery proceedings contained in the existing section 46(7), has been dealt with here. For the sake of simplicity, the limit has been expressed in all cases (vide the proviso in the draft) as commencing from the last day of the financial year concerned. Under this scheme, it becomes unnecessary to reproduce section 46(7), 2nd Proviso.

Notes to clause 243

The only addition made is the clarification in sub-clause (b) to the effect that the Government may also institute a suit for recovery of arrears.

Notes to clause 244

Existing section 23B(5) has been incorporated here. The provision was inserted only for the avoidance of doubts; it has, however, not been disturbed in the draft.

Notes to clause 245

This clause does not need any comments.

Income-Tax Act, 1922 Back

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