Recovery u/s 226(3) of income tax act?
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
15 October 2011
Is second party liable to pay amount due to first party (assessee) , to third party (Tax Department) , in case notice u/s 226(3) is issued to second party, i.e is it necessary to comply with 226(3)?
What are the legal complication in complying with 226(3)as aganist first party(assessee).
Is second party liable to pay amount due to first party (assessee) , to third party (Tax Department) , in case notice u/s 226(3) is issued to second party, i.e is it necessary to comply with 226(3)?
What are the legal complication in complying with 226(3)as aganist first party(assessee).
15 October 2011
Yes,the second party is liable to pay to the Tax authorities. Also see the following sub-sections
226(3)(vi) Where a person(means second party) to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the assessee(first party) or that he does not hold any money for or on account of the assessee, then, nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the Assessing Officer or Tax Recovery Officer to the extent of his own liability to the assessee on the date of the notice, or to the extent of the assessee's liability for any sum due under this Act, whichever is less.
226(3)(x) If the person(includes second party also) to whom a notice under this sub-section is sent fails to make payment in pursuance thereof to the Assessing Officer or Tax Recovery Officer he shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were an arrear of tax due from him, in the manner provided in sections 222 to 225 and the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under section 222.
226(3)(vi) Where a person(means second party) to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the assessee(first party) or that he does not hold any money for or on account of the assessee, then, nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the Assessing Officer or Tax Recovery Officer to the extent of his own liability to the assessee on the date of the notice, or to the extent of the assessee's liability for any sum due under this Act, whichever is less.
226(3)(x) If the person(includes second party also) to whom a notice under this sub-section is sent fails to make payment in pursuance thereof to the Assessing Officer or Tax Recovery Officer he shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were an arrear of tax due from him, in the manner provided in sections 222 to 225 and the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under section 222.
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