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Collection & Recovery under IT Act-AO's Perspective

COLLECTION & RECOVERY

"No tax shall be levied or collected except by authority of law”.
Collection & Recovery is the ultimate aim of an Assessing Officer and this is the fruits of our all action in implementing the Income tax law. We are mainly working to see legitimate taxes go to the Government coffers which needed for smooth running of Government as well as for developmental work to be carried out. The taxes so collected develops the society as ultimately develops the nation economically. As the process of our work start with filing of return of Income then assessment and ends with collection of taxes as Regular Assessment tax by way of collection & recovery in addition to collection by way of Advance tax, Self Assessmt tax, TDS.
As per the Article 265 of the Constitution of India “no tax shall be levied or collected except by authority of law”. It is the duty of the assessees to pay the tax what is rightfully due to the Government and it is the responsibility of the tax officials to collect the revenue what is rightfully due to the Government by following due process of law.
The recovery of outstanding demand is the responsibility of Assessing Officer before drawing of certificate to TRO u/s 222. Once certificate is drawan Recovery power shifts to TRO. Before drawing up certificate to TRO, A O is required to ensure that all the action for recovery of tax has been undertaken by him, as provided u/s 221 to sec. 226 of the IT Act..

I am trying here to outline the processes of Collection & Recovery at Assessing officers end, to my capacity and knowledge. It is also my endeavor to highlight the circumstances where we generally fail due to our wrong steps. This is a very vast area and we have enormous power with us but it requires appropriate step at appropriate action of time.
For our convenience to understand better, we may devide the Collection & recovery in two parts: prior to Assessment collection & recovery and post Assessment collection & recovery.
[a] Prior Assessment Recovery:
We usually do not use this mode of recovery procedure but in some cases where there is chances of deficulty overseen on latter stages this mode of recovery proceedings are required to be initiated. In case of non-action at this stage leads to non collection of taxes as the funds are diverted by the assessee.
Provisional Attachment U/s 281B:
This mode of collection start with Provisional Attachment to protect revenue in certain cases u/s 281B of the Income-tax Act.
The law of recovery is based on Civil Procedure Code, 1908.Therefore, knowledge of Civil Procedure Code relating to recovery will help us to make a better representation and to render correct advice, when an issue comes for coconsideration The provisions of section 281B is akin to the section 94(b) and Order 38, Rules 5 & 6 of the Code of Civil Procedure Code (CPC), 1908. Section 281B can be invoked only “During Pendency of any proceedings for assessment or reassessment”.
The Assessing Officer, with the previous approval of Principal Chief Commissioner or Chief Commissioner, Principal Commissioner, Commissioner, Principal Director General or Director General or Principal Director or Director, by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the Second Schedule.
Every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1) of section 281B Provided that the competent authority as mentioned above, may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so, however, that the total period of extension shall not in any case exceed two years or sixty days after the date of order of assessment or reassessment, whichever is later.
In the Circular no 179 dated 30-9-1975 (1976) 102 ITR (St.)9(20) it is stated that this new provision has been made in order to protect the interests of the revenue in cases where the raising of demand is likely to take time because of investigations and there is apprehension that the assessee, may thwart the ultimate collection of that demand. It is prime importance that order for provisional attachment must be speaking based on facts of the case, in case of the mechanical order without any reasons are liable to be quashed.GauravGoel v. CIT (2000) 245 ITR 169 ( Cal )(High Court)]

The apex court in, Raman Tech & Process Engg.Co. v. Solanki Traders (2008) 2 SCC 302 held that the power of provisional attachment is a drastic and extraordinary power. Such power should not be exercised mechanically or merely for the asking. It should be used sparingly and strictly in accordance with the rule .
Requisite of opinion and past History of defaults:

The question arises how to decide when invoking of provisional attachment u/s 281B is essential. Two things are important. The first and foremost requisite is nature of information on which demand is expected to be created combined with nature of business and quantum of addition to be made resulting in demand to be raised. The nature of information in possession is more important when addition likely to be made relates to different source from the source of business shown in the return filled. Thereby history of default, if any, will be the furtherance of decision of provisional attachment. It is to be kept in mind that in the absence of any material or circumstances on the basis of which requisite opinion could be formed under section 281B and in absence of any material of facts and/or history of past defaults of the assessee, the impugned order passed under section 281B provisionally attaching the bank accounts and extension thereof, is unwarranted and will not stand judicial parameters as in that case most likely assessee may file writ petition.

Sufficient safeguard has been provided in the section itself so that the honest assessees are not put in to difficulties.

 Assets that can be attached:
Any property in name of assessee can be provisionally be attached u/s 226 of The IT Act, whether movable or immovable. But in case of jointly owned property, only undivided share of assessee can be attached provisionally and not entire property. Similarly, fixed deposits in the name of HUF, only share of assessee can be attached and not entire fixed deposit.
It can be gathered from the Bombay High Court case of Gandhi Trading v. ACIT (1999) 239 ITR 337 (Bom) (High Court), that there must be some justification with regard to quantum of different property to be attached and expected demand to be raised. Atleast the continuation of provisional attachment on the bank account and fixed deposits, in any event should not be equated with attachment in the course of recovery proceedings.

 Some of the case laws that can be referred to with regard to provisional attachment are as under:
1. Raghu Ram Grah P. Ltd. v. ITO &Ors.(2006) 281 ITR 147 (All.)(High Court)
2. Seshasayee Paper & Boards Ltd. v. CIT (2003) 261 ITR 63 (Ma)
3. S. Subramanian v.CIT (2004)186 CTR 286 /136 Taxman 653 (Mad) (High Court)
4. Satyabir Singh v.CIT (2001) 248 ITR 785 (P&H) (High Court)
5. Electro Zavod (India) Pvt .Ltd v.CIT (2005) 278 ITR 187 (Cal.)(High Court)
6. Shaw Wallace & Co. Ltd v. CTO (1996) 100 STC 270 (AP)(High Court).

After Assessment Recovery proceedings:-

 The most important part of our action of assessment proceedings is collection & Recovery of demand raised as a result of assessment. Demand notice u/s 156 is issued along with copy of order. Notice u/s 156 gives 30 days of time to pay the demand. This period of 30 days can be reduced by the Assessing Officer if, by any reason, he deemed fit, with the approval of JCIT/Addl. C I T, and he may reduce the period. But it is always essential to give a reasonable time to assessee to pay the demand and decision of reducing period of payments lower than 30 days must be with application of mind.
 The assessee to whom such notice was served fails to pay the demand can be treated as "Assessee in default". All the recovery matter starts with treating assessee in default.
 The recovery proceedings starts with issuance of notice U/s 220 of It Act.
 Quetion arises Who and under what conditions an assessee can be declared as “Assessee in default”.

Provisions of 2(7), 140A(3),156, 179,191,200, 220(5), 226(3)(x), 282, 283, 284 of Income Tax Act, 1961 and Order 5 Rules 15, 17, 18 and 19 of CPC:- any of the sections of IT Act referred to and CPC Rules come to play in treating Assessee in default.

Conditions for treating assessee in default is not limited to issue of notice u/s 156.

#The other conditions under which an assessee can be treated as Assessee in default:
#  If the order is passed under section 179 against Director, the Director of Company can be treated assessee in default under section 220(4), it is not necessary that the assessing Officer has to issue notice under section 156.
#Similarly under section 140A(3), when anassessee fails to pay the whole or any part of the self assessment tax or interest or both in accordance with section 140A(1), he shall be deemed to be an assessee in default.
# If the person mentioned in section 200 does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required under this Act, he shall be treated as assessee in default.
#Similarly if order u/s 210(3) is issued and assessee does not gives any reply as required u/s 210(5) regarding reasons for non payment or less payment of advance tax than the order passed u/s 210(3). Assessee may be treated as Assessee in default
# It is very important to dispose of all pending proceedings before moving the recovery proceedings such as pending rectification petition, stay petition and/or Appeal effects, if any, etc.


# Consequences after assessee is treated in default
# Charge of mandatory interest under section 220(2). At present it is 1% p.m. or part of a month
# Penalty under section 221: In addition to the amount of the arrears and the amount of interest payable under sub-section (2) of section 220, assessee be liable, by way of penalty, to pay such amount as the Assessing Officer may direct, and in the case of a continuing default, such further amount or amounts as the Assessing Officer may, from time to time, direct, so, however, that the total amount of penalty does not exceed the amount of tax in arrears :
# Attachment u/s 226 of IT Act / auction of moveable / immovable properties for collection of outstanding demand
#; Prosecution /arrest / detention
#; Stay of Demand : Section 220(3), 220(4)
# Moneys belonging to the assessee in default which are in the custody of a Court or Receiver are also liable for attachment. Further, on being authorised by the Commissioner, the Assessing Officer is also empowered to recover the tax by distraint and sale of movable property as laid down in the Third Schedule. In addition, tax may be recovered, through the State Government if the recovery of tax in any area has been entrusted to it under the Constitution. In such a case the State Government may direct that the tax shall be recovered in respect of any particular area together with the municipal taxes or local rates by municipality or local authority [Section 227].

Attaching the bank accounts even before communicating the order passed on the stay application is totally high handed. The parameters laid down by High Court in case of KEC International Ltd. has to be followed.l
# Instruction no. 96 (F .no 1/6/69 –ITCC dated 21/08/1969) which had clearly indicated that when the income assessed is substantially higher than the returned income of the assessee that is to say if assessed income is twice the returned income or more than of recovery of tax demand, stay should be normally be granted unless there are lapses or non-cooperation on the part of assessee. However department always contend that instruction of 1969 now stands superseded by instruction no 1914 (F.no. 404 /72/93 –ITCC dated 2-12-1993).However the Tribunal and courts are following the spirit of earlier instruction.
Protective Assessment Recovery of Tax:
# Protective assessment is permissible. But recovery in pursuance of such precautionary assessment is not permitted. In the case of substantial Assessment relief is granted by appalete authority, recovery proceedings may be immeditely initiated against protective Assessment.


#  Garnishee proceedings
# Section 226(3) is applicable only when money is due to the assessee-in-default from any person. Section 226(3)(vi) in categorical terms creates a legal fiction to the effect that when an amount is not payable, such person is not required to pay any such amount or part thereof.
#; Assessee can approach the Assessing Officer against garnishee proceedings and request for withdrawal. Filing of writ is not the remedy.

#; The presumption of withdrawal of the garnishee order for recovery is without any legal base because of the reasons that with the withdrawal of the notice of garnishee, the action taken in furtherance of garnishee order falls down and possession of the property is required to be restored to the assessee and if the Assessing Officer by exercising power under sub-clause (vii) of sub section (3) of section 226 of the said Act obtains money from the payee of the assessee, he has been given power to withdraw the notice and it cannot be interpreted to mean that notice can be withdrawn only before giving effect to the garnishing order and receiving the money by the Assessing Officer. Otherwise the words at any time or from time to time will be of no consequence in sub clause (vii) of sub-section (3) of the section 226. The Court held that the assessee is free to challenge the order of non–revocation of the garnishee order under sub clause (vii) of sub section (3) of section 226.


Properties which can be attached. (Garnishee proceedings)

1. Fixed deposit with bank yet to mature can be covered under section 226(3).
2. Any Bank Account
3. Attachment of rent: Rent payable by a tenant is a debt and can be subject matter of attachment under section 226(3)(S.46(5A) of 1922 Act)
4. Tax due can be recovered by attachment of rents accruing after the death of deceased from property inherited by his legal representatives.
5. Time barred debt cannot be subject matter of section 226(3), because limitation Act, 1963 does not provide for any exception to recover a time barred debt in favour of the revenue.
6. No recovery proceeding till refunds are adjusted – Gandhi Sons v. Asstt. Commissioner (1994) 95 STC 205 (Ker)
7. Income tax dues being Crown debt, shall get priority over other unsecured creditors (not secured creditors) - Builders Supply Corporation v. UOI (1965) 56 ITR 91 (SC).
However, Secured creditor gets Priority of dues to Government. Income-tax department by way of attachment of assets cannot claim for priority over secured creditor for realization of Income-tax due.


Properties which cannot be attached

1. As per Rule 10(1) of the second Schedule of the Income-tax Act, all such property as is by the Code of Civil Procedure, 1908 exempted from attachment and sale in execution of a decree of a Civil Court shall be exempt from attachment and sale under the said schedule. Section 60 of the Civil Procedure Code provides the list of assets which cannot be attached, even with the consent of the assessee. Few examples.
2. The necessary wearing apparel
3. Personal ornaments, accordance with religious usage cannot be parted with any woman,
4. Tools of artisans,
5. House occupied by agriculturist,
6. Deposit in Public provident fund
7. Money payable under policy of Insurance on the judgment debtor
8. The interest of lessee of a residential building which the provisions of law for the time being in force relating to control of rents and accommodation apply,
9. Sale proceed of nomination rights of defaulter members of Stock Exchange cannot be attached – Stock Exchange, Mumbai v. V.S. Kandalgaonkar (2003) 261 ITR 577 (Bom)(High Court).
10. Property of sons not be attached in case of liability of father –
11. Properties belonging to the joint family was attached by TRO for realization of tax arrears of firm in which the assessee karta was a partner. Father was a partner of the firm in his individual capacity investing his monies and not on behalf of HUF though he was a joint family manager. It was held that only share belonging to father was liable to be attached and not the rest of belonging to the sons.

12. “Interest of a lessee of a residential building” – Clause(kc) appended to the proviso of section 60(1), CPC prohibits the attachment and sale of interest of a lessee of a residential building twhich the Rent Control Act applies but the said prohibition is not applicable to the interest of a tenant of a non-residential premises to which Maharashtra Rent Control Act applies and therefore, it can safely be held that the interest of the tenant in the non-residential premises to which Maharashtra Rent Control Act, 1999 (20 of 2000) applies is attachable and saleable in execution of the decree against the tenant.
Tangerine Electronic Systems Pvt. Ltd. v. Indian Chemicals AIR (2000) Bom (198, 210) (FB)
13. Overdraft bank accounts having certain limit cannot be attached. K.M.Adam v. ITO (1958) 33 ITR 26 (Mad.)(High Court)

Assessee in default - Joint and several liabilities
Recovery from Directors (Joint and several-S.179): Provision can be made applicable only when the Assessing Officer cannot recover the tax from the Company .The Assessing Officer has to give a finding that he is not in a position to recover the tax from the Company. In the absence of such finding the Assessing Officer does not get jurisdiction to invoke section 179 of the Act.
The other condition is that before recovery from Directors, the revenue must prove that the said directors were responsible for the conduct of the business in the said previous year in relation to which liability exists. The Assessing Officer has to hear the director before passing an order under section 179.
Recovery is possible from the Director if the director is unable to prove that non-recovery is not attributable to the director’s gross neglect, misfeasance and breach of duty.

Where company was agitating against the assessment order and disputing the liability to pay the amount assessed, it could not be held that the non recovery of tax was not due to negligence or breach of duty on the part of the directors

When the Assessment for the relevant years of the company was complete and final and it was not open to a director to challenge those proceedings in a proceeding under section 179. Liability of the Director can be only in respect of the arrears of tax during the period in which the person was director.
Salary earned by the Director from another company can also be attached.

# 224 . liability of a manager of a company

(1) Every person being manager at any time during the financial year shall be jointly and severally liable at any time during the financial year shall be jointly and severally liable for the payment of any amount due under this Code in respect of the company for the financial year , if the amount cannot be recovered from the company

(2) The provisions of sub–section(1) shall not apply, if the manager proves that non-recovery cannot be attributable to any neglect, misfeasance or breach of duty on his part in relation to affairs of the company.

(3) The provisions of this section shall prevail over anything to the contrary contained in the Companies Act , 1956

(4) In this section term ‘manager’ shall include a managing director and both shall have the meaning respectively assigned to them in section clause (24) and clause (26) of section 2 of the Companies Act , 1956 (1 of 1956)

Partnership Firm
Partners liability of the partner to pay the firm tax.

a) Section 25 of the Partnership Act and section 188A of the Income–tax Act. All partners including legal heirs of the deceased partners are jointly and severally liable for the dues of partnership, if they were partners of firm at the relevant time.
b) Arrears of tax of firm can be recovered from erstwhile partner also.

Limited liability partnership.

# Section 167C of the Income tax act, where the tax is due from the limited liability partnership, such tax cannot be recovered then every partner of the LLP at any time during relevant previous year shall be jointly and severally liable unless he proves that non–recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of LLP


Hindu undivided family
# Members of HUF.S.171 (6): As per section 171, the liability of the members of HUF is joint and several, however, if the demand pertains to the period after partition of the HUF, then the liability of the members is restricted to the portion of the joint family property allotted to each of them.

Property Located outside India.

As per section 228A (2), if India has an agreement with the country, where the assets are located and the tax is due in India from non-resident.
S. 222 tax arrears in respect of non-resident from his assets –The amounts of tax arrears due from a non-resident may be recovered from-
(a) any asset of the non-resident , wherever located ; or
(b) any amount payable by any person to non-resident.



Petition of assessee to keep the demand in abeyance
There is provision u/s 220(3) when even demand is outstandinng Assessee may not treated as assessee in default. There is no word in the legislation as stay of demand but for the sake of convenience we use word as stay of demand. An application for keeping assessee not in default i.e. stay of disputed demand must be made before the Assessing Officer before the expiry of time prescribed in notice of demand.

The request for stay of demand should be with reasons stating how the assessee is entitled for stay of recovery, how addition made was not proper, financial difficulties etc. The asseessee must request for stay of recovery till the appeal is disposed. If the issue is covered by jurisdictional High or Apex Court, refer the case laws. Assessee may also refer the financial difficulties faced by the assessee. How the assessee is complying with the guidelines laid down by the courts may also be demonstrated. In absence these conditions the request is liable to rejected summarily. In most of cases simple application is filed by assessee without supporting reason and in those cases it is easy to deal with such stay petitions.
The request for stay or granting of installment may be considered in cases referred in previous para. The stay of demand or granting of installment must be speaking one should not be flat. There must be conditions that up to decision of appeal along with limit of certain period after which decision may be reviewed. At the same time stay must be for the part of demand related to the disputed demand as referred above.
The Requisit Parameters for stay of Demand

Stay applications have to be dealt with, in accordance with the guidelines stipulated by the Board in Circular Nos. 530 dt. 6.3.1989, 589 dt. 16.1.1991 and Instruction No. 1914 dated 02.12.1993. In exercising this discretion, the Assessing Officer should take into account circumstances, such as, whether:-
i. the points in dispute relate to facts or are a consequence of different interpretations of law;
ii. the additions have been made as a result of detailed investigation;
iii. they are based on materials gathered through enquiry / survey / search and seizure operations;
iv. they have been assessed elsewhere by way of protective assessment and the tax thereon has been paid by such person etc.
The following parameters in this regard are not exhaustive, they are only recommendatory in nature:

(i) While considering the stay application, it is important at least to set out the case of the assessee.
(ii) In cases where the assessed income under the impugned order far exceeds returned income, it is to be considered whether the assessee has made out a case for unconditional stay. If not, whether looking to the questions involved in appeal, a part of the amount should be ordered to be deposited for which purpose, some short prima facie reasons could be given in the order.
(iii) In cases where the assessee relies upon financial difficulties, the AO can briefly indicate whether the assessee is financially sound and viable to deposit the amount if the AO wants the assessee to so deposit.
(iv) It is also to be examined whether the time to prefer an appeal has expired. Generally, coercive measures may not be adopted during the period provided by the statute to go in appeal. However, if the authority concerned comes to the conclusion that the assessee is likely to defeat the demand, it may take recourse to coercive action for which brief reasons may be indicated in the order. It is to clarify that if the authority concerned complies with the above parameters while passing orders on the stay application, then he need not once again give reasons while taking coercive action.
In the case of stay or granting of instalment interest u/s 220(2) of ITAct is chargeable.
(v) In case of Failure to Fulfill Condition attached to a stay order, the stay automatically gets vacated. This is because in such a case, what is granted is only a conditional stay, that is, subject to fulfillment of the conditions.
As per Instruction: No. 12/2004, dated 18/10/2004 the Board has issued instructions to safeguard the interest of revenue when stay is granted by Tribunal and High Court. The condition of stay not complied with department will bring to the notice to the Tribunal or Court and Stay will be vacated.

In Mahindra and Mahindra v. UOI (1992) 59 E.L.T. 505 (Bom.)(High Court) the court held that, no coercive action should be taken till the expiry of the appeal period against the said order is over. Therefore the Assessing Officer is duty bound to wait for the expiry of time period of appeal before proceeding to recover the tax due.
In Mahindra and Mahindra Ltd v Assessing Officer (2007) 295 ITR 43(Bom) (High Court), where garnishee proceedings were issued even without affording a fair opportunity to be heard and the bank accounts of the assessee were frozen within one week of passing of order, the High Court took strong note of the case and issued a notice against officer for contempt proceedings and held that such proceedings should not be initiated as the Officer has not followed the principle of Bombay High Court (supra) and also directed the Assessing Officer to deposit the money so coercively collected to the Registrar General of the Court.Show cause was issued to the Assessing Officer as to why contempt action should not be initiated under the provisions of the Contempt Court of Courts Act for prima facie knowingly and willfully disobeying the aforesaid two judgments of Bombay High Court.51ITR 158 (Bom)(High Court)

# Power to Stay the Recovery Proceedings.

The AO, Range Head and CIT is empowered to stay the recovery of tax against an application filed by the assessee. Besitay recovery of tax:
1. The CIT(A) is empowered to stay the recovery of tax against an application filed by the assessee.
2. Power of the Tribunal to grant stay of recovery is toward tax, interest and even penalty.
3. Even assessee may file writ petition before High Court more particularly in case of any wrong move undertaken with respect to recovery proceedings.
CIRCULARS AND INSTRUCTIONS:
1. Circular no 96 (F.NO 1/6/69 –ITC ) DATED 21-8-1969
2. Circular dated 11-12-1970 – Regd –Assurance Given by the Minister for Revenue and Expenditure ooksabha on 11-12-1970. (Reproduced in Vikrambhai Punjabhai Plakhiwala v. S.M Ajbanji Recovery Officer and others (1990) 182 ITR 413 (Guj)(High Court) (at 420 , 421)
3. Circular no 334 dated 3-4-1982 ( 1982) 135 ITR 10 (st)
4. Circular no 530 dated 6-3-1989 (1989 ) 176 ITR 240 (st)
5. Circular no 589 dated 16-1-1991 (1991 ) 187 ITR 79 (st)
6. Instruction no 1914 –F No 404 /72/93 –ITCC dated 2-12-1993
7. Instruction no 1944 – dated 27-8-1997
Related case laws:
1) Prem Prakash Tripathi v. CIT (1994) 208 ITR 461 (All)(High Court)
2) Tin Mfg. Co. India Ltd. v. CIT( 1995) 212 ITR 451 (All)(High Court). Paulsons Litho Works v. ITO(1994 ) 208 ITR 676 (Mad)(High Court)
3) Agricultural Produce Market Committee vs. CIT (2005) 279 ITR 371 (Pat.)(High Court)
4) Debasish Moulik vs. Dy. CIT( 1998 ) 231 ITR 737 (Cal.)(High Court)
5) Smita Agrawal (Ind.) vs. CIT (2009)184 Taxman 59(All)(High Court
6) LG Electronics India Pvt. Ltd v. CIT (2012) 209 Taxman 536(All)(High Court)
7) CITY and Industrial Development Corporation of Maharashtra Ltd v. ACIT (2012) 343 ITR 102 (Bom.) (High Court)
8) Idea Cellular Ltd v. CIT ( 2012) 75 DTR 105 (MP) (High Court)
9) Balaji Universal Tradelink (P) Ltd. v. UOI (2012) 76 DTR 132 (Bom.)(High Court)
10) Broswel Pharmaceutical Inc. vs. ITO (2004) 83 TTJ 126 (All.) (Trib.)
11) Separate procedure is followed in Stay granted matter as per direction issued by the President U.O. No. F. 29-Cent.Jd./2007 dt. 19th July, 2007.
12) As per stay application before lower authorities – DHL Express (India) Pvt. Ltd. vs. ACIT(2011) 140 TTJ 38 (Mum)(Trib)
13) B. Sudhadra vs. ITO (2005) 272 ITR 100 (AT)(Hyd.)(Trib.)
14) Narang Overseas P. Ltd. vs. ITO (2007) 295 ITR 22 (Bom) (High Cpower
15) CIT v. Ranuk Industries Ltd. (2011) 333 ITR 99 (Bom)(High Court)
16) CIT v. Ecom Gill Coffee Trading Pvt. Ltd(2012) 74 DTR 241/209 Taxman 190/252 CTR 281(Karn.)( High Court)
17) CIT v B. Fouress (P) Ltd (2012) 74 DTR 241/209 Taxman 190/252 CTR 281 (Karn.) (High Court)
18) Maruti Suzuki India Ltd v. Dy. CIT ( 2012) 347 ITR 43 ( Delhi )(High Court)

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ANNEXURE
                                         TRACKING OF DEFAULTER ASSESSEE
Thousands of Crore demand are locked due to the various reasons and one of such reason is because of Assessees are not traceable. We use various tools to trace out the assessees for collection & recovery and that starts with sending of notices by various means i.e. though Notice Server, through Inspector. After that we depute Inspectors do conduct enquiry with Post Office, Police Station and the local people of the Area. This all we do on the basis of information available in the Assesses records.
Time has been changed and now assessee can traced with other means. Some of the other means are as under:-
1. Information on AST system: The information regarding Assessee can also be gathered from AST system with respect to various addresses available on record. Information is also available regarding various partnership firm in which one is partner and PAN of such other firm and after obtaining PAN one can obtain current/new address of Assessee including his new or different business activities and ultimately through attachments recovery of old demands can be achieved. This will also help in preparing Write off proposal.
2. Information with CIBIL:- One of the authentic tool is information received from Credit Information Beurow of India Ltd.(CIBIL). The CIBIL is a company which gives credit Ratings of Individual, Company and firm including LLP to the Banks proposing to grant Loan. The CIBIL tracks the payment of loan and default made by the party. The information can be obtained from CIBIL u/s 133 (6) of IT Act. The address of CIBIL is as under:
CREDIT INFORMATION BUREAU (INDIA) LIMITED.
Hoechst House, 6th Floor,
193 Backbay Reclamation,
Nariman Point, Mumbai 400 021.
Tel : +91 - 22 - 6638 4600.

3. Information With Ministry of Company Affairs:-
The information is also available with Ministry of Company Affairs regarding Company and LLP and their Director and Partners. The information is available online of Website of Ministry of Company Affairs under MCA21. By giving name of the Company and the CIN no. one can track the name of directors and their addresses. The information is also available regarding the name of other company or LLP in which one is also director or partner. The CIN no. can also be obtained from the site by giving full name of the company/LLP.
All these can be used for tracing the Assessee for collection & Recovery purposes.
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Disclaimer: The contents of this document are solely for informational purpose. It does not constitute deprtmental/legal/ professional advice or a formal recommendation. I have tried to incorporate provisions on my own capacity and resources. All my friends are always welcome to make comments suggest improvement to the article. In my views also the same is not complete and needs improvement & incorporation of case laws in more details.).
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138
Pankaj Mehta on March 26 2015 15:57:30

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» I am speechless. Such a wonderful narration of the real plight of an assessing officer. Hats off to you sir.
» Dada, your explanation style is just superb and the topic choosen are also untouched by us. Sometimes we wonder why we did not see the things so de...
» Very informative and in depth knowledge given in this article at same time very concise. Dada's presentation is unparallel.
» Avinash sir Very nice information provided in this article. You are requested to provide the froms if available so that we can record the state...