INCOME-TAX (CERTIFICATE PROCEEDINGS) RULES, 1962
(1) These rules may be called the Income-tax (Certificate Proceedings) Rules, 1962.
(2) They shall come into force on the 1st day of April, 1962.
Rule 1 of the Income-tax (Certificate Proceedings) Rules, 1962, establishes the short title, commencement date, and scope of the rules governing the procedure for recovery of income tax dues through certificate proceedings. It provides the legal framework for enforcement officers to execute tax recovery actions efficiently and uniformly across jurisdictions.
Rule 1 states that the Rules may be cited as the Income-tax (Certificate Proceedings) Rules, 1962, and specifies that they shall come into force on April 1, 1962. It sets the foundation for the procedural aspects of tax recovery under the Income Tax Act, 1961, including the powers and duties of tax recovery officers.
In summary, Rule 1 of the Income-tax (Certificate Proceedings) Rules, 1962, provides the foundational legal framework for the recovery of income tax dues, emphasizing clarity, procedural fairness, and effective enforcement, while safeguarding the rights of third parties and ensuring judicial oversight.
In these rules, unless the context otherwise requires,--
(1) "Act" means the Income-tax Act, 1961 (43 of 1961);
(1A) "authorised bank" shall have the same meaning as in clause (aa) of sub-rule (1) of rule 2 of the Income-tax Rules, 1962;
(2) "public officer" shall have the same meaning as in the Code of Civil Procedure, 1908 (5 of 1908);
(3) "principal rules" means the rules contained in the Second Schedule to the Act; and
(4) "
All references to "Forms" in these rules shall be construed as references to the forms set out in the Appendix hereto.
Omitted by the Income-tax (Certificate Proceedings) (Amendment) Rules, 1971, w.e.f. 1-1-1972.
Omitted by the Income-tax (Certificate Proceedings) (Second Amendment) Rules, 1990.
. [Omitted by the Income-tax (Certificate Proceedings) (Second Amendment) Rules, 1990]
1Prior to omission rule 7 read as under:
7. Jurisdiction of other Tax Recovery Officers.(1) Tax Recovery Officers referred to in subclause (i) of clause (44) of section 2 shall exercise jurisdiction within the respective areas in which they exercise, or are authorized to exercise, the powers of a Collector under the law relating to land revenue for the time being in force in the State concerned.
(2) Tax Recovery Officers referred t
. Where any proceeding for execution of a certificate pending before a Tax Recovery Officer stands transferred or is transferred to any other Tax Recovery Officer, the Tax Recovery Officer to whom the proceeding stands transferred or is transferred may continue the proceedings from the stage at which it stood immediately before such transfer and such transfer shall not render necessary the re-issue of any notice, warrant, proclamation, order, or certificate already issued.]
1Substituted by the IT (Certificate Proceedings) (Second Amendment) Rules, 1990. Prior to Substitution rule 8 read as under:
8. (1) Wit
The Income-tax (Certificate Proceedings) Rules, 1962, govern the procedures for the recovery of income-tax dues through certificate proceedings. Rule 8 specifically deals with the transfer of proceedings between Tax Recovery Officers, ensuring administrative flexibility and proper jurisdictional management in recovery actions [Source: ""].
Rule 8 stipulates that proceedings initiated before a Tax Recovery Officer (TRO) can be transferred from one TRO to another. This transfer is permissible to facilitate effective recovery, address jurisdictional issues, or administrative convenience. The rule ensures that such transfer does not affect the rights of the parties involved and maintains continuity of proceedings [Source: ""].
Rule 8 itself does not specify any punishment. However, non-compliance with the transfer procedure or wrongful transfer could potentially lead to administrative or legal consequences, including quashing of proceedings or disciplinary action against officers if misconduct is involved [Source: ""].
This concise legal commentary synthesizes the provisions, scope, and judicial perspective on Rule 8 of the Income-tax (Certificate Proceedings) Rules, 1962, highlighting its role in efficient tax recovery processes.
When a certificate is sent by a Tax Recovery Officer to another Tax Recovery Officer under sub-section (2) of section 223, he shall--
(i) keep a copy of the certificate in his office; and
1[(ii) inform the Assessing Officer of his having sent the certificate.]
1Substituted by the IT (Certificate Proceedings) (Second Amendment) Rules, 1990. Prior to Substitution clause (ii) read as under:
(ii) inform the Income-tax Officer from whom the certificate was received of his havi
(1) Where only a part of the amount in respect of which certificate has been 1[drawn up by a] Tax Recovery Officer is to be recovered by any other Tax Recovery Officer under sub-section (2) of section 223, the Tax Recovery Officer shall, before sending a copy of the certificate to the other Tax Recovery Officer, endorse on such copy a certificate in the following form:
When a certificate or the certified copy of a certificate is sent by a Tax Recovery Officer to another Tax Recovery Officer under sub-section (2) of section 223, such other Tax Recovery Officer shall follow the same procedure as is laid down in the principal rules and these rules including the issue of the notice under rule 2 of the principal rules.
The Tax Recovery Officer shall intimate the details of all amounts recovered in respect of a certificate, from time to time to the Assessing Officer, and, also, to any Tax Recovery Officer to whom the certificate or a certified copy of the Certificate has been sent by him under sub-section (2) of section 223.]
1Substituted by the IT (Certificate Proceedings) (Second Amendment) Rules, 1990. Prior to Substitution, rule 11 read as under:
11. The Tax Recovery Officer to whom a certificate has been forwarded by an Income-tax Officer under sub-section (1) of section 223 shall intimate the details of all amounts recovered in respect of such certificate from ti
When a certificate [or the certified copy of a certificate] is sent by a Tax Recovery Officer to another Tax Recovery Officer under sub-section (2) of section 223, such other Tax Recovery Officer shall communicate to the first-mentioned Tax Recovery Officer 1[and to the Assessing Officer] the details of all amounts recovered by him in respect of such certificate from time to time.
1 Substituted for and to the Income-tax Officer who issued the certificate by the IT (Certificate Proceedings) (Second Amendment) Rules, 1990.
The Income-Tax (Certificate Proceedings) Rules, 1962, govern the procedures for the recovery of tax dues through certificate proceedings. Section R.12 specifically deals with the intimation process by the Tax Recovery Officer (TRO) to other officers involved in recovery proceedings.
Section R.12 provides for the intimation to be made by the other Tax Recovery Officer regarding the proceedings under a certificate. It facilitates communication between officers to ensure coordinated recovery efforts.
This commentary synthesizes the procedural and legal significance of Section R.12 within the framework of the Income-Tax (Certificate Proceedings) Rules, 1962, highlighting its role in ensuring effective and coordinated tax recovery efforts.
Omitted by the Income-tax (Certificate Proceedings) (Second Amendment)
Rules, 1990.
The notice of demand under rule 2 of the principal rules shall be issued in Form No. I.T.C.P. 1 1[ which shall be in Form No. 57 of the Income-tax Rules, 1962] which may be so varied as the circumstances of each case may require.
............................................
1Inserted by the IT (Certificate Proceedings) (Second Amendment) Rules, 1990.
Where, in the course of investigation made under rule 11 of the principal rules, the Tax Recovery Officer is satisfied that the property is subject to a mortgage or charge (other than a mortgage or charge referred to in section 281 or rule 16 of the said rules) in favour of some person not in possession, and thinks fit to continue the attachment, he may do so, subject to such mortgage or charge.
For the purpose of ascertaining the matters to be specified in a proclamation of sale, the Tax Recovery Officer may summon any person whom he thinks necessary to summon and may examine him in respect of any matters relevant to the proclamation and require him to produce any document in his possession or power relating thereto.
If the Tax Recovery Officer is of the opinion that it will be more advantageous to appoint a person other than an official subordinate to him to sell a property, he may appoint a fit person for the purpose and fix the remuneration to be allowed to him for rendering such services; and the remuneration payable to such person shall be deemed to be costs of the sale.
It shall be competent for the Tax Recovery Officer to fix a reserve price in respect of any property, other than agricultural produce, to be sold and order that any bid shall be accepted only on condition that it is not less than the said reserve price.
The officer conducting a sale shall forthwith pay the entire amount received by him from the purchaser of the property into the Government treasury and shall submit a full report of the sale to the Tax Recovery Officer.
The proceeds of the sale of immovable property shall not be disbursed until the sale is confirmed by the Tax Recovery Officer or, where an appeal has been filed against the order confirming the sale, until the disposal of the appeal.
Every Tax Recovery Officer granting a certificate of sale to the purchaser of immovable property sold under the Second Schedule shall send a copy of such certificate to the registering officer concerned under the Indian Registration Act, 1908 (16 of 1908), within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in the certificate is situate.
The following forms, which may be so varied as the circumstances of each case may require, shall be used for the purpose mentioned against each :--
(i) Form No. I.T.C.P. 2, for issuing a warrant of attachment of movable property under rule 20 of the principal rules;
(ii) Form No. I.T.C.P. 3, for issuing a prohibitory order in the case of a debt not secured by a negotiable instrument
under rule 26(1)(i) of the principal rules;
(iii) Form No. I.T.C.P. 4, for issuing a prohibitory order in the case of a share in a corporation under rule rule 26(1)(ii) of
the principal r
The rules in this part relate to movable property (other than agricultural produce) attached by actual seizure under the Second Schedule.
(1) Where the property attached is of such a nature that its removal from the place of attachment is impracticable or its removal involves expenditure out of proportion to the value of the property, the attaching officer shall, subject to any directions which the Tax Recovery Officer may issue in this behalf, arrange for the proper maintenance and custody of the property at the place of attachment. The attaching officer shall forthwith send a report of having done so to the Tax Recovery Officer.
(2) On receipt of a report from the attaching officer under sub-rule (1), the Tax Recovery Officer may either order the removal of the property to a place which he shall specify or sanction its maintenance and custody at the place of attachment under such conditions as he may think fit.
Where the attached property is not kept at the place of attachment, it shall be kept in the custody of an officer (hereinafter in this part referred to as the "custody officer") subordinate to the Tax Recovery Officer and authorised by the Tax Recovery Officer for this purpose. The custody officer may remove the property to the office of the Tax Recovery Officer for custody under his own supervision or, with the approval pf the Tax Recovery Officer, may make such arrangements as may be convenient and economical for its safe custody with any other fit person under his own supervision and the Tax Recovery Officer may fix the remuneration to be allowed to such person.
Notwithstanding anything contained in rule 24 or rule 25, the attaching officer or the custody officer may, with the previous approval of the Tax Recovery Officer, entrust, subject to his right of supervision, the attached property to the defaulter on his executing a duly stamped bond (sapurdnama) in Form No. I.T.C.P. 23 which may be so varied as the circumstances of each case may require.
Explanation : Where the Tax Recovery Officer proceeds to recover any arrears due from the defaulter by attachment and sale of, or by appointing a receiver for the management of, any movable or immovable property which is held by or stands in the name of, any of the persons referred to in the Explanation to sub-section (1) of section 222 and which is included in the defaulter's movable or immovable property by virtue of that Explanation, the reference
If the property attached consists of cash, Government or other securities, bullion, jewellery or other valuables, the attaching officer shall send them for safe custody to the nearest Government treasury or a branch of the Reserve Bank of India or State Bank of India or of its subsidiaries or of any authorised bank.
When the property remains at the place where it is attached in the custody of the attaching officer, and any person other than the defaulter claims the same, or any part thereof, the officer shall nevertheless remain in possession and shall direct the claimant to prefer his claim to the Tax Recovery Officer.
(1) If in consequence of withdrawal or cancellation of the attachment, the defaulter becomes entitled to receive back the movable property attached, the possession thereof shall be given to him on payment of costs, charges and expenses due, if any, in respect of the execution of the certificate against such property.
(2) For the purpose of giving possession under sub-rule (1), the attaching officer shall inform the defaulter that the property is at his disposal.
(3) In the absence of any person to take charge of the property the officer shall, if the property has been moved from the premises in which it was seized, replace it where it was found at the time of seizure.
In default of the payment of costs, charges and expenses referred to in sub-rule (1) of rule 29, the movable property or such portion thereof as may be necessary shall be sold by auction and after defraying the expenses of such sale and the costs, charges and expenses aforesaid, the balance, if any, of the movable property as has not been sold shall be handed over to the defaulter.
Whenever livestock is kept at the place where it has been attached, the defaulter shall be at liberty to undertake the due feeding and tending of it, under the supervision of the attaching officer.
In the event of the defaulter failing to feed attached livestock, the livestock may be placed in the custody of the custody officer or in the circumstances mentioned in rule 33 may be placed in a pound maintained by the Government or a local authority.
If there be any such pound near the office of the Tax Recovery Officer, the attaching officer or the custody officer may place in it such attached livestock as can properly be kept there in which case the pound-keeper shall be responsible for the livestock and shall receive the same rates for accommodation and maintenance thereof as are payable in respect of impounded cattle of the same description.
Notwithstanding anything contained in rule 33, the custody officer may, with the approval of the Tax Recovery Officer, entrust the attached livestock to any other fit person under his own supervision and the Tax Recovery Officer may fix the remuneration to be allowed to such person after taking into account the local circumstances and the charges which such person may have to incur for the maintenance and custody of such livestock.
The expenses of maintenance and custody of movable property including the remuneration payable to the person concerned under rule 25 or rule 34 shall be deemed to be costs of the sale.
(1) Where the property sold is movable property of which actual seizure has been made, it shall be delivered to the purchaser.
(2)(a) Where the property sold is movable property in the possession of some person other than the defaulter, the delivery thereof to the purchaser shall be made by giving notice to the person in possession prohibiting him from delivering possession of the property to any person except the purchaser and requiring him to deliver possession of the property to the purchaser within the time stipulated by the Tax Recovery Officer.
(b) Where such person in possession of the property fails without reasonable cause to deliver possession of the property to the purchaser within the time stipulated by the Tax Recovery Officer, or w
(1) Where the execution of a document or he endorsement of the party in whose name a negotiable instrument or a snare in a corporation is standing is required to transfer such negotiable instrument or share to a person who has purchased it under a sale under the Second Schedule, the Tax Recovery Officer may execute such document or make such endorsement as may be necessary and such execution or endorsement shall have the same effect as an execution or endorsement by the party
.
(2) Such execution or endorsement may be in the following form, namely :--
"..... by ..... Tax Recovery Officer ..... in the proceedings for the recovery of
arrears under the Income-tax Act, 1961, against ....."
&n
In the case of any movable property not hereinbefore provided for, the Tax Recovery Officer may make an order vesting such properly in the purchaser or as the purchaser may direct; and such property shall vest accordingly.
(1) Where the immovable property sold is in the occupancy of the defaulter or of some person on his behalf or of some person claiming under a litle created by the defaulter subsequently to the attachment of such property and a certificate in respect thereof has been granted under rule 65 of the principal rules, the Tax Recovery Officer shall, on the application of the purchaser, order delivery to be made by pulling such purchaser on any person whom the purchaser may appoint to receive delivery on his behalf in possession of the properly, and if need be, by removing any person who refuses to vacate the same.
(2) For the purposes of sub-rule (1), if the person in possession does not afford free access, the Tax Recovery Officer may, after giving reasonable warning and facility to any woman not appearing in public according to the customs
Where the immovable property sold is in the occupancy of a tenant or other person entitled to occupy the same and a certificate in respect thereof has been granted under rule 65 of the principal rules, the Tax Recovery Officer shall, on the application of the purchaser, order delivery to be made by affixing a copy of the certificate of sale in some conspicuous place on the property, and proclaiming to the occupant by beat of drum or other customary mode, at some convenient place, that the interest of the defaulter has been transferred to the purchaser.
(1) Where the purchaser of immovable property sold in execution of a certificate is resisted or obstructed by any person in obtaining possession of the property, he may make an application to the Tax Recovery Officer complaining of such resistance or obstruction within thirty days of the date of such resistance or obstruction.
(2) The Tax Recovery Officer shall fix a day for investigating the matter and shall summon the party against whom the application is made to appear and answer the same.
Where the Tax Recovery Officer is satisfied that the resistance or obstruction was occasioned without any just cause by the defaulter or by some other person at his instigation, he shall direct that the applicant be put into possession of the property, and where the applicant is still resisted or obstructed in obtaining possession, the Tax Recovery Officer may also, at the instance of the applicant, take steps to put the applicant into possession of the property by removing the defaulter or any person acting at his instigation.
Where the Tax Recovery Officer is satisfied that the resistance or obstruction was occasioned by any person (other than the defaulter) claiming in good faith to be in possession of the property on his own account or on account of some person other than the defaulter, the Tax Recovery Officer shall make an order dismissing the application.
(1) Where any person other than the defaulter is dispossessed of immovable property sold in execution of a certificate by the purchaser thereof, he may make an application to the Tax Recovery Officer complaining of such dispossession within thirty days of such dispossession.
(2) The Tax Recovery Officer shall fix a day for investigating the matter and shall summon the party against whom the application is made to appear and answer the same.
Where the Tax Recovery Officer is satisfied that the applicant was in possession of the property on his own account or on account of some person other than the defaulter, he shall direct that the applicant be put into possession of the property.
Nothing in rules 43 and 45 shall apply to resistance or obstruction by a person to whom the defaulter has transferred the property after the service of a notice under rule 2 of the principal rules or to the dispossession of any such person.
Any party not being a defaulter against whom an order is made under rule 42 or rule 43 or rule 45 may institute a suit in a civil court to establish the right which he claims to the present possession of the property.
A receiver appointed under the Second Schedule shall have all such powers, as to bringing in and defending suits and for the realisation, management, protection and preservation of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the Tax Recovery Officer thinks fit.
The Tax Recovery Officer may, by general or special order, fix the amount to be paid as remuneration for the services of the receiver.
(1) Every receiver so appointed shall--
(a) furnish such security (if any) as the Tax Recovery Officer thinks fit, duly to account for what he shall receive in respect of the property;
(b) submit his accounts at such periods and in such form as the Tax Recovery Officer directs;
(c) pay the amount due from him as the Tax Recovery Officer directs; and
(d) be responsible for any loss occasioned to the property by his wilful default or gross negligence.
(2) The receiver shall
(1) Where a receiver fails to submit his accounts at such periods and in such form as the Tax Recovery Officer directs, the Tax Recovery Officer may direct his property to be attached until such time as such accounts are submitted to him.
(2) The Tax Recovery Officer may at any time make an enquiry as to the amount, if any, due from the receiver, as shown by his accounts or otherwise, or an enquiry as to any loss to the property occasioned by his wilful default or gross negligence and may order the amount found due, if not already paid by the receiver under rule 50, or the amount of the loss so occasioned, to be paid by the receiver within a period to be fixed by the Tax Recovery Officer.
(3) Where the receiver fails to pay any amount which he h
An order of appointment of a receiver under rule 69 or rule 70 of the principal rules, shall be made in Form No. I.T.C.P. 24 which may be so varied as the circumstances of each case may require.
A person against whom an order of detention has been passed under Part V of the Second Schedule may be detained in the civil prison of the district in which the office of the Tax Recovery Officer ordering the detention is situate, or, where such civil prison does not afford suitable accommodation, in any other place which the State Government may appoint for the detention of persons ordered by the civil courts of such district to be detained.
(1) The subsistence allowance shall be supplied by the 1[Tax Recovery] Officer by monthly instalments in advance before the first day of each month.
(2) The first payment shall be made to the Tax Recovery Officer for such portion of the current month as remains unexpired before the defaulter is committed to the civil prison, and the subsequent payment (if any) shall be made to the officer in charge of the civil prison.
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1Substituted for Income-Tax by the IT (Certificate Proceedings) (Second Amendment) Rules, 1990.
The following forms, which may be so varied as the circumstances of each case may require, shall be used for the purpose mentioned against each :
(i) Form No. I.T.C.P. 25, for issuing a notice to show cause why a warrant of arrest should not issue under rule 73 of the principal rules:
(ii) Form No. I.T.C.P. 26, for issuing a warrant of arrest under Part V of the principal rules;
(iii) Form No. I.T.C.P. 27, for issuing a warrant of detention under Part V of the principal rules;
(iv) Form No. I.T.C.P. 28, for issuing an order of release under rule 77 or rule 78 or ru
(1) Every appeal under 2[* * *] sub-rule (1) of rule 86 of the principal rules, shall be made in Form No. I.T.C.P. 29A which shall be verified in the manner indicated therein and shall be accompanied by a copy of the order appealed against.
(2) The form of appeal prescribed by sub-rule (1), the grounds of appeal and the form of verification appended thereto shall be signed :--
(a) in the case of an individual, by the individual himself; where the individual is absent from India, by the individual concerned or by some person duly authorised by him in this behalf; and where the individual is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf;
(1) The 1[Chief Commissioner or Commissioner] shall fix a day and place for the hearing of the appeal and shall give notice of the same to the appellant and the 1[Chief Commissioner or Commissioner] against whose order the appeal is preferred.
(2) The following shall have the right to be heard at the time of appeal :--
(a) the appellant, either in person or by [an authorised representative] referred to in rule 62 of these rules;
(b) the Tax Recovery Officer, either in person or by a representative.
(3) The 1[Chief Commissioner or Commissioner] may, if sufficient ca
The following scale of fees shall be charged for service and execution of processes issued under the Second Schedule and these rules :
Where the amount mentioned in the certificate
Exceeds Rs.1,000 is Rs. 1,000 or under
(a) Notice of Demand
(b) Warrant of attachment
(c) Warrant of arrest
(d) Warrant of delivery
(e) Proclamation of sale
(f) Any process not provided for hereinabove Rs.
1.50
&nb
(1) In respect of any sale made in the execution of a certificate, there shall be levied a fee by way of poundage on the gross amount realised by the sale, calculated at the rate of 2 per cent on such gross amount up to Rs. 1,000 and at the rate of 1 per cent on the excess of such gross amount over Rs. 1,000.
(2) The poundage fee leviable under sub-rule (1) shall be calculated on multiples of Rs. 25, that is to say, a poundage fee of 50 paise shall be levied for every Rs. 25, or part of Rs. 25, realised by the sale up to Rs. 1,000 and in the case of the proceeds of the sale exceeding Rs. 1,000, an additional fee of 25 paise for every Rs. 25 or part thereof on the excess of such amount over Rs. 1,000, shall be levied.
(3) Where the sale is in mor
1[(1) Except in cases where copies are supplied free under rules or instructions in force, copying fees shall be charged for supplying a copy of any document at the rate of Re. 1 for each page of such document.] (2) Copying fees shall be payable in advance.
2[(3) The fees to be charged for the supply of a copy of any document urgently shall be Rs. 4 for each document, in addition to the fees payable under sub-rule (1).]
....................................................................
1Substituted by the IT (Certificate Proceedings) (Amendment) Rules, 1992, w.e.f. 1-5-1992. Prior to substitution, sub-rule
(1) Fees for inspecting records of proceedings before the 1[Chicf Commissioner or Commissioner] or Tax Recovery Officer under the Second Schedule shall, where such inspection is permitted, be charged as follows :
(a) for the first hour or part thereof ... 2[Rs. 2]
(b) for every additional hour or part thereof ... 50 Paise.
(2) Fees for inspection shall be payable in advance.
.................................................
1Substituted for Tax Recovery Commissioner by the IT (Certificate Proceedings) (Second Amendment)
A notice to the legal representative of a deceased defaulter under rule 65 of the principal rules read with rule 2 of those rules shall be issued in Form No.I.T.C.P. 29 which may be so varied as the circumstances of each case may require.
A notice to a surety under rule 88 of the principal rules read with rule 2 of those rules shall be issued in Form No. I.T.C.P. 30 which may be so varied as the circumstances of each case may require.
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