Stay of proceedings in pursuance of certificate and amendment or cancellation thereof
[Section-415 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 415(1) of Income Tax Act 2025
415(1) The Tax Recovery Officer may grant time for the payment of any tax and, till the expiry of such time, shall stay the recovery proceedings for such tax.
Section 415(2) of Income Tax Act 2025
415(2) Where a certificate has been drawn up and subsequently, the amount of the outstanding demand is reduced as a result of an appeal or other proceeding under this Act, the Tax Recovery Officer shall—
- 415(2)(a) if the order is the subject-matter of further proceeding under this Act, stay the recovery of such part of the amount specified in the certificate as pertains to the said reduction for the period for which the appeal or other proceeding remains pending; or
- 415(2)(b) if the order which was the subject-matter of such appeal or other proceeding has become final and conclusive, amend the certificate, or cancel it.
FAQs on Section 415 of Income Tax Act 2025
What is the power of the Tax Recovery Officer to grant time for tax payment under Section 415(1)?
The Tax Recovery Officer may grant time for the payment of any tax, and until that time expires, the recovery proceedings for such tax must be stayed.
When does the Tax Recovery Officer stay recovery proceedings as per Section 415(2)(a)?
If a certificate has been drawn up and the amount is reduced due to an appeal or other proceeding under this Act, and if that order is still under further appeal or proceeding, the Tax Recovery Officer shall stay the recovery of the reduced amount for the period during which the proceeding remains pending.
What action is taken if the appellate order becomes final as per Section 415(2)(b)?
If the order that reduced the tax amount has become final and conclusive, the Tax Recovery Officer must amend or cancel the recovery certificate accordingly.
Does the Tax Recovery Officer have discretion to amend or cancel the certificate?
Yes, once the reduction in demand becomes final and conclusive, the officer is obligated to amend or cancel the certificate to reflect the reduced liability.
Is stay of recovery automatic upon filing an appeal?
No, stay of recovery under Section 415(2)(a) applies only to the reduced portion of the demand and only while the relevant proceeding or appeal remains pending.
What happens if the appeal increases the tax liability instead of reducing it?
Section 415 deals specifically with situations where the amount is reduced. If the tax liability increases, the provision does not apply to stay or amend the certificate based on that increase.
Can the Tax Recovery Officer partially stay recovery?
Yes, under Section 415(2)(a), the Tax Recovery Officer stays recovery only for the portion of the demand that has been reduced, not the entire amount.
Does Section 415 apply even after the certificate has been drawn up?
Yes, both subsections of Section 415 specifically deal with situations where a certificate has already been drawn up.
What is the purpose of amending or cancelling a certificate under Section 415(2)(b)?
The purpose is to ensure that the recovery proceedings are aligned with the final and conclusive outcome of the appeal or other proceeding, preventing enforcement of an incorrect tax amount.
Is there a time limit for amending or cancelling the certificate after the appellate order becomes final?
Section 415 does not specify a time limit, but the amendment or cancellation must be done once the order becomes final and conclusive.
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