If a person is a defaulter in filing tax, how can and in what ways, the income tax department enforce such penalty? if the person has a single property can the department recover from the property? what if the property is sole means of residence? and what if the person gifts the property to his son?
1. If there is no disclosure of income resulting in deficit or non payment of tax the IT department can impose penalty as well initiate prosecution.
2. however before doing all these the Department would send the show cause notice.
3. If any proeprty tax is due then the beneficiary of the gift deed will be liable to make payment for arrears tax.
you can be prosecuted for non payment .
1) section 276C 1 Willful attempt to evade tax, penalty or interest or under-reporting of Income (non-cognizable offence under section 279A)—
(a) where tax sought to be evaded exceeds Rs. 1 lakh (Rs. 25 lakh w.e.f. 1-7-2012)
6 months to 7 years
(b) in other cases
3 months to 3 years (2 years w.e.f. 1-7-2012)
2) section 276C 2 Wilful attempt to evade payment of any tax, penalty or interest (non-cognizable offence under section 279A) 3 months to 3 years (2 years w.e.f. 1-7-2012)
3) income tax authorities can attach and sale the defaulter's immovable property.any transaction in respect of the property under attachment can be made only with the permission of the Tax Recovery Officer,
4) order to evade taxes if property is transferred in favour of son income tax department can move court to set aside gift deed
in what cases the income tax department can attach and sale the defaulters immovable property? and if the property is the sole means of residence? there was a recent high court/supreme court judgement on this subject, can you tell me the name of the case if possible.
When a certificate has been drawn up by the Tax Recovery Officer] for the recovery of arrears the Tax Recovery Officer shall cause to be served upon the defaulter a notice requiring the 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
2) If the amount mentioned in the notice is not paid within the time specified therein or within such further time as the Tax Recovery Officer may grant in his discretion, the Tax Recovery Officer shall proceed to realise the amount by one or more of the following modes :—
(a) by attachment and sale of the defaulter’s movable property;
(b) by attachment and sale of the defaulter’s immovable property;
(c) by arrest of the defaulter and his detention in prison;
(d) by appointing a receiver for the management of the defaulter’s movable and immovable properties
3)Section 60 of the CPC deals with attachment and sale of the property in execution of the decree but there are certain exemptions in which Section 60(c) of the CPC which provides that the houses and other buildings with the material and the sites thereof and the land immediately appurtenant thereto and necessary for their enjoyment belonging to an agriculturist or a labourer or a domestic servant and occupied by him cannot be attached and sold. In Section 60(1)(c) of the CPC, there are further additions by the State of Punjab, which is referred here-in-above, in which we are concerned with Section 60(1)(ccc) of the CPC which provides that one main residential house and other buildings attached to it belonging to the judgment debtors other than an agriculturist and occupied by him is also exempted.
The income tax department will initiate process to recover the arrears as per the provisions of law.
The property transferred in the name of son by a registered gift deed shall not fall within the ambit of recovery process.
The department will produce the source of income and assets with documentary proof while executing the decree obtained for recovery of arrears amount, if there is no means of income with the defaulter/judgment debtor, then it may file application for civil arrest.
When a certificate has been drawn up by the Tax Recovery Officer] for the recovery of arrears under this Schedule, the Tax Recovery Officer shall cause to be served upon the defaulter a notice requiring the 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.
If the amount mentioned in the notice is not paid within the time specified therein or within such further time as the Tax Recovery Officer may grant in his discretion, the Tax Recovery Officer shall proceed to realise the amount by one or more of the following modes :—
(a) by attachment and sale of the defaulter’s movable property;
(b) by attachment and sale of the defaulter’s immovable property;
(c) by arrest of the defaulter and his detention in prison;
(d) by appointing a receiver for the management of the defaulter’s movable and immovable properties.
If the defaulter disputes any adjustment under clause (b) of sub-rule (1), the Tax Recovery Officer shall determine the dispute.]
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.
The Tax Recovery Officer’s decision as to what property is so entitled to exemption shall be conclusive