Section 173 — Recovery of Tax in Respect of Non-Resident From His Assets
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Live. Part I of Chapter XV (Recovery of tax in respect of non-residents).
Subject: Without prejudice to section 161(1) or section 167, where a non-resident's income is chargeable, the tax may be recovered by deduction under the relevant provisions and any arrears may be recovered from any assets of the non-resident which are or may at any time come within India.
Finance Act, 2026: No change. Chapter XV is untouched by the Finance Act, 2026; the section stands as amended up to the Finance Act, 2025.
A. SECTION COMMENTARY
1. An asset-attachment backstop
Section 173 is a recovery-enabling provision specific to non-residents. It operates without prejudice to the representative-assessee liability in section 161(1) and the recovery remedies in section 167, and provides that tax on a non-resident's chargeable income may be recovered by deduction at source under the relevant provisions, and that any arrears may be recovered from any assets of the non-resident that are, or may at any time come, within India. It is, in substance, the asset-side backstop to the scheme by which a non-resident's Indian income is brought to tax through an agent or representative assessee (sections 160–163) or charged under a special code (section 172).
2. No section-specific authority; cognate principle
Section 173 has not been the subject of reported merits litigation construing the section itself; it is enabling recovery machinery read with the agent/representative-assessee scheme and the deduction provisions. The honest position is that there is no section 173 authority to cite, and none should be invented. The nearest governing principles are those on the agent/representative-assessee liability that section 173 enforces (the conditions precedent and connected-income limits under sections 160–163, set out under section 163) and the general principle that recovery provisions creating substantive liability operate prospectively (Govinddas, set out under section 171). These are cited as cognate only.
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (FA-2025 base), is set out below.
173. Without prejudice to the provisions of sub-section (1) of section 161 or of section 167, where the person entitled to the income referred to in clause (i) of sub-section (1) of section 9 is a non-resident, the tax chargeable thereon, whether in his name or in the name of his agent who is liable as a representative assessee, may be recovered by deduction under any of the provisions of Chapter XVII-B and any arrears of tax may be recovered also in accordance with the provisions of this Act from any assets of the non-resident which are, or may at any time come, within India.
C. AUTHORITIES
Candour rule. No reported decision construes section 173 on the merits; it is asset-attachment recovery machinery for non-residents. The cognate authorities are the agent/representative-assessee scheme (sections 160–163) and the prospectivity principle in Govinddas.
Cluster A — Cognate authority
Cited as cognate only: the agent/representative-assessee conditions and connected-income limit (Barendra Prasad Ray 129 ITR 295 SC; WABCO India 407 ITR 317 Mad — set out under section 163), and the prospectivity of recovery provisions (Govinddas 103 ITR 123 SC — set out under section 171). These define the substantive liability that section 173 enforces against the non-resident's Indian assets.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a provision omitted by amendment and retained only to mark the omission. The Finance Act, 2026 amends no section of Chapter XV of the Income-tax Act, 1961 (its Part-A amendments touch ss.92CA, 139, 140B, 144B, 144C, 147A, 148, 150, 153, 153B, 220, 222, 234, 245, 245MA, 254 and 270A-276 only). Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.
CHAPTER XV — LIABILITY IN SPECIAL CASES
Section 173 — Recovery of Tax in Respect of Non-Resident From His Assets
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Provision: Live. Part I of Chapter XV (Recovery of tax in respect of non-residents).
Subject: Without prejudice to section 161(1) or section 167, where a non-resident's income is chargeable, the tax may be recovered by deduction under the relevant provisions and any arrears may be recovered from any assets of the non-resident which are or may at any time come within India.
Finance Act, 2026: No change. Chapter XV is untouched by the Finance Act, 2026; the section stands as amended up to the Finance Act, 2025.
A. SECTION COMMENTARY
1. An asset-attachment backstop
Section 173 is a recovery-enabling provision specific to non-residents. It operates without prejudice to the representative-assessee liability in section 161(1) and the recovery remedies in section 167, and provides that tax on a non-resident's chargeable income may be recovered by deduction at source under the relevant provisions, and that any arrears may be recovered from any assets of the non-resident that are, or may at any time come, within India. It is, in substance, the asset-side backstop to the scheme by which a non-resident's Indian income is brought to tax through an agent or representative assessee (sections 160–163) or charged under a special code (section 172).
2. No section-specific authority; cognate principle
Section 173 has not been the subject of reported merits litigation construing the section itself; it is enabling recovery machinery read with the agent/representative-assessee scheme and the deduction provisions. The honest position is that there is no section 173 authority to cite, and none should be invented. The nearest governing principles are those on the agent/representative-assessee liability that section 173 enforces (the conditions precedent and connected-income limits under sections 160–163, set out under section 163) and the general principle that recovery provisions creating substantive liability operate prospectively (Govinddas, set out under section 171). These are cited as cognate only.
B. STATUTORY POSITION (verbatim text)
The text of the section, as it stands in the Act (FA-2025 base), is set out below.
173. Without prejudice to the provisions of sub-section (1) of section 161 or of section 167, where the person entitled to the income referred to in clause (i) of sub-section (1) of section 9 is a non-resident, the tax chargeable thereon, whether in his name or in the name of his agent who is liable as a representative assessee, may be recovered by deduction under any of the provisions of Chapter XVII-B and any arrears of tax may be recovered also in accordance with the provisions of this Act from any assets of the non-resident which are, or may at any time come, within India.
C. AUTHORITIES
Candour rule. No reported decision construes section 173 on the merits; it is asset-attachment recovery machinery for non-residents. The cognate authorities are the agent/representative-assessee scheme (sections 160–163) and the prospectivity principle in Govinddas.
Cluster A — Cognate authority
Cited as cognate only: the agent/representative-assessee conditions and connected-income limit (Barendra Prasad Ray 129 ITR 295 SC; WABCO India 407 ITR 317 Mad — set out under section 163), and the prospectivity of recovery provisions (Govinddas 103 ITR 123 SC — set out under section 171). These define the substantive liability that section 173 enforces against the non-resident's Indian assets.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced from the Income-tax Act, 1961 (text as printed in the local Act, base text amended up to the Finance Act, 2025), with the publisher's footnote apparatus and amendment-marker brackets removed; three asterisks (***) denote words or a provision omitted by amendment and retained only to mark the omission. The Finance Act, 2026 amends no section of Chapter XV of the Income-tax Act, 1961 (its Part-A amendments touch ss.92CA, 139, 140B, 144B, 144C, 147A, 148, 150, 153, 153B, 220, 222, 234, 245, 245MA, 254 and 270A-276 only). Citations are stated as reported; orders of the Tribunal and High Courts are flagged as such. Where a section has not been judicially construed, that is stated candidly and the nearest governing authority is given. This material is for professional reference and is not legal advice.