CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | D.—COLLECTION AND RECOVERY
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | D.—COLLECTION AND RECOVERY
Section 226 — Other Modes of Recovery
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live; the parallel recovery code operated by the Assessing Officer or TRO without (or alongside) a certificate — salary attachment, the garnishee notice under sub-section (3), recourse to a court holding the assessee's money, and distraint under the Third Schedule.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: Recovery without certificate by AO (226(1)) or with certificate by TRO (226(1A)) via: (2) requisition on salary payer; (3) garnishee notice to any person who owes or holds money for the assessee (with objection-on-oath protection, joint-account presumption, prior intimation to assessee, and 'deemed assessee in default' for a defaulting garnishee); (4) application to a court holding the assessee's money; (5) distraint and sale of movables under the Third Schedule.
Litigation profile: Heavily litigated, overwhelmingly on the garnishee power in sub-section (3): the need for a debtor-creditor relationship, the protection where the garnishee objects on oath, the bar on the TRO adjudicating a bona fide dispute, and the mandatory prior intimation to the assessee.
A. COMMENTARY
Two tracks of recovery
Section 226 supplies modes of recovery that run parallel to the Second Schedule certificate. Sub-section (1) lets the Assessing Officer use them where no certificate has been drawn up; sub-section (1A) lets the TRO use them in addition to the certificate modes. The available tools are attachment of salary (sub-section (2)), the garnishee notice (sub-section (3)), an application to a court that holds the assessee's money (sub-section (4)), and distraint and sale of movables under the Third Schedule (sub-section (5)).
The garnishee notice — sub-section (3)
The most important and most litigated power. By written notice the AO/TRO may require any person who owes money to, or holds money for, the assessee to pay it over. The power rests on a subsisting debtor-creditor relationship between the garnishee and the assessee (M. Damodar Bhat; Vysya Bank): there must actually be money due or held. A garnishee may protect himself by objecting on oath that nothing is due or held (clause (vi)); the authority cannot then compel payment, and cannot itself adjudicate a bona fide dispute about the existence or quantum of the debt — that is for the civil court (U.P. Carbon & Chemicals). A false objection, however, exposes the garnishee to personal liability.
Safeguards and consequences
Clause (iii) requires a copy of the notice to be sent to the assessee; in practice, prior intimation to the assessee before withdrawing attached bank funds has been treated as mandatory, and coercive withdrawal during the pendency of a stay application has been deprecated (UTI Mutual Fund). A joint-account holder's share is presumed equal until the contrary is shown (clause (ii)). A garnishee who fails to comply is 'deemed to be an assessee in default' and may be proceeded against as if the amount were his own arrear (clause (x)).
B. STATUTORY TEXT (verbatim)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025; the Finance Act, 2026 makes no amendment to this section. Editorial '[Omitted...]' notes are those of the Legislature.
Other modes of recovery.
226. (1) Where no certificate has been drawn up under section 222, the Assessing Officer may recover the tax by any one or more of the modes provided in this section.
(1A) Where a certificate has been drawn up under section 222, the Tax Recovery Officer may, without prejudice to the modes of recovery specified in that section, recover the tax by any one or more of the modes provided in this section.
(2) If any assessee is in receipt of any income chargeable under the head "Salaries", the Assessing Officer or Tax Recovery Officer may require any person paying the same to deduct from any payment subsequent to the date of such requisition any arrears of tax due from such assessee, and such person shall comply with any such requisition and shall pay the sum so deducted to the credit of the Central Government or as the Board directs :
Provided that any part of the salary exempt from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1908 (5 of 1908), shall be exempt from any requisition made under this sub-section.
(3) (i) The Assessing Officer or Tax Recovery Officer may, at any time or from time to time, by notice in writing require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Assessing Officer or Tax Recovery Officer either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount.
(ii) A notice under this sub-section may be issued to any person who holds or may subsequently hold any money for or on account of the assessee jointly with any other person and for the purposes of this sub-section, the shares of the joint holders in such account shall be presumed, until the contrary is proved, to be equal.
(iii) A copy of the notice shall be forwarded to the assessee at his last address known to the Assessing Officer or Tax Recovery Officer, and in the case of a joint account to all the joint holders at their last addresses known to the Assessing Officer or Tax Recovery Officer.
(iv) Save as otherwise provided in this sub-section, every person to whom a notice is issued under this sub-section shall be bound to comply with such notice, and, in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or any other document to be produced for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary.
(v) Any claim respecting any property in relation to which a notice under this sub-section has been issued arising after the date of the notice shall be void as against any demand contained in the notice.
(vi) Where a person to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee, then nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the Assessing Officer or Tax Recovery Officer to the extent of his own liability to the assessee on the date of the notice, or to the extent of the assessee's liability for any sum due under this Act, whichever is less.
(vii) The Assessing Officer or Tax Recovery Officer may, at any time or from time to time, amend or revoke any notice issued under this sub-section or extend the time for making any payment in pursuance of such notice.
(viii) The Assessing Officer or Tax Recovery Officer shall grant a receipt for any amount paid in compliance with a notice issued under this sub-section, and the person so paying shall be fully discharged from his liability to the assessee to the extent of the amount so paid.
(ix) Any person discharging any liability to the assessee after receipt of a notice under this sub-section shall be personally liable to the Assessing Officer or Tax Recovery Officer to the extent of his own liability to the assessee so discharged or to the extent of the assessee's liability for any sum due under this Act, whichever is less.
(x) If the person to whom a notice under this sub-section is sent fails to make payment in pursuance thereof to the Assessing Officer or Tax Recovery Officer, he shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were an arrear of tax due from him, in the manner provided in sections 222 to 225 and the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under section 222.
(4) The Assessing Officer or Tax Recovery Officer may apply to the court in whose custody there is money belonging to the assessee for payment to him of the entire amount of such money, or, if it is more than the tax due, an amount sufficient to discharge the tax.
(5) The Assessing Officer or Tax Recovery Officer may, if so authorised by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner by general or special order, recover any arrears of tax due from an assessee by distraint and sale of his movable property in the manner laid down in the Third Schedule.
C. AUTHORITIES
The authorities concentrate on the garnishee power in section 226(3).
1. Garnishee power under section 226(3) — scope and limits
III ITO, Mangalore v. M. Damodar Bhat (1969) 71 ITR 806 (SC)
Holding The leading authority on the garnishee power: in a proceeding under section 226(3) it is not necessary that the assessee be in default or deemed in default — no such condition is imposed by the sub-section; the provision applies to amounts assessed even under the 1922 Act, ensuring continuity of recovery.
Use Cited for the foundational scope of section 226(3) and the absence of a 'default' pre-condition for a garnishee notice.
U.P. Carbon & Chemicals Ltd. v. TRO (2014) 368 ITR 384 (Allahabad)
Holding Section 226(3) applies to an admitted liability; the TRO cannot adjudicate a bona fide dispute between the garnishee and the assessee, nor can he, on his own, hold that the garnishee's statement on oath was false; questions of quantum of liability belong to the civil court.
Use The standard authority protecting a garnishee who genuinely disputes the debt and limiting the TRO's adjudicatory role.
Vysya Bank Ltd. v. JCIT (1999) 241 ITR 178 (Karnataka)
Holding A garnishee notice presupposes a debtor-creditor relationship and money actually due or held for the assessee; amounts that are not 'money due' (e.g., the mere availability of an overdraft facility) cannot be attached under section 226(3).
Use Cited to resist garnishee notices on overdraft/credit facilities and where no debt subsists.
2. Mandatory intimation and no coercive recovery during stay
UTI Mutual Fund v. ITO (2012) 345 ITR 71 (Bombay)
Holding Recovery by garnishee/attachment must not be coercive while a stay or appeal is pending; the assessee must be given notice and a reasonable opportunity to seek relief before attached funds are withdrawn.
Use The principal authority against premature or unintimated garnishee recovery from bank accounts.
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | D.—COLLECTION AND RECOVERY
Section 226 — Other Modes of Recovery
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live; the parallel recovery code operated by the Assessing Officer or TRO without (or alongside) a certificate — salary attachment, the garnishee notice under sub-section (3), recourse to a court holding the assessee's money, and distraint under the Third Schedule.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: Recovery without certificate by AO (226(1)) or with certificate by TRO (226(1A)) via: (2) requisition on salary payer; (3) garnishee notice to any person who owes or holds money for the assessee (with objection-on-oath protection, joint-account presumption, prior intimation to assessee, and 'deemed assessee in default' for a defaulting garnishee); (4) application to a court holding the assessee's money; (5) distraint and sale of movables under the Third Schedule.
Litigation profile: Heavily litigated, overwhelmingly on the garnishee power in sub-section (3): the need for a debtor-creditor relationship, the protection where the garnishee objects on oath, the bar on the TRO adjudicating a bona fide dispute, and the mandatory prior intimation to the assessee.
A. COMMENTARY
Two tracks of recovery
Section 226 supplies modes of recovery that run parallel to the Second Schedule certificate. Sub-section (1) lets the Assessing Officer use them where no certificate has been drawn up; sub-section (1A) lets the TRO use them in addition to the certificate modes. The available tools are attachment of salary (sub-section (2)), the garnishee notice (sub-section (3)), an application to a court that holds the assessee's money (sub-section (4)), and distraint and sale of movables under the Third Schedule (sub-section (5)).
The garnishee notice — sub-section (3)
The most important and most litigated power. By written notice the AO/TRO may require any person who owes money to, or holds money for, the assessee to pay it over. The power rests on a subsisting debtor-creditor relationship between the garnishee and the assessee (M. Damodar Bhat; Vysya Bank): there must actually be money due or held. A garnishee may protect himself by objecting on oath that nothing is due or held (clause (vi)); the authority cannot then compel payment, and cannot itself adjudicate a bona fide dispute about the existence or quantum of the debt — that is for the civil court (U.P. Carbon & Chemicals). A false objection, however, exposes the garnishee to personal liability.
Safeguards and consequences
Clause (iii) requires a copy of the notice to be sent to the assessee; in practice, prior intimation to the assessee before withdrawing attached bank funds has been treated as mandatory, and coercive withdrawal during the pendency of a stay application has been deprecated (UTI Mutual Fund). A joint-account holder's share is presumed equal until the contrary is shown (clause (ii)). A garnishee who fails to comply is 'deemed to be an assessee in default' and may be proceeded against as if the amount were his own arrear (clause (x)).
B. STATUTORY TEXT (verbatim)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025; the Finance Act, 2026 makes no amendment to this section. Editorial '[Omitted...]' notes are those of the Legislature.
Other modes of recovery.
226. (1) Where no certificate has been drawn up under section 222, the Assessing Officer may recover the tax by any one or more of the modes provided in this section.
(1A) Where a certificate has been drawn up under section 222, the Tax Recovery Officer may, without prejudice to the modes of recovery specified in that section, recover the tax by any one or more of the modes provided in this section.
(2) If any assessee is in receipt of any income chargeable under the head "Salaries", the Assessing Officer or Tax Recovery Officer may require any person paying the same to deduct from any payment subsequent to the date of such requisition any arrears of tax due from such assessee, and such person shall comply with any such requisition and shall pay the sum so deducted to the credit of the Central Government or as the Board directs :
Provided that any part of the salary exempt from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1908 (5 of 1908), shall be exempt from any requisition made under this sub-section.
(3) (i) The Assessing Officer or Tax Recovery Officer may, at any time or from time to time, by notice in writing require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Assessing Officer or Tax Recovery Officer either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount.
(ii) A notice under this sub-section may be issued to any person who holds or may subsequently hold any money for or on account of the assessee jointly with any other person and for the purposes of this sub-section, the shares of the joint holders in such account shall be presumed, until the contrary is proved, to be equal.
(iii) A copy of the notice shall be forwarded to the assessee at his last address known to the Assessing Officer or Tax Recovery Officer, and in the case of a joint account to all the joint holders at their last addresses known to the Assessing Officer or Tax Recovery Officer.
(iv) Save as otherwise provided in this sub-section, every person to whom a notice is issued under this sub-section shall be bound to comply with such notice, and, in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or any other document to be produced for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary.
(v) Any claim respecting any property in relation to which a notice under this sub-section has been issued arising after the date of the notice shall be void as against any demand contained in the notice.
(vi) Where a person to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee, then nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the Assessing Officer or Tax Recovery Officer to the extent of his own liability to the assessee on the date of the notice, or to the extent of the assessee's liability for any sum due under this Act, whichever is less.
(vii) The Assessing Officer or Tax Recovery Officer may, at any time or from time to time, amend or revoke any notice issued under this sub-section or extend the time for making any payment in pursuance of such notice.
(viii) The Assessing Officer or Tax Recovery Officer shall grant a receipt for any amount paid in compliance with a notice issued under this sub-section, and the person so paying shall be fully discharged from his liability to the assessee to the extent of the amount so paid.
(ix) Any person discharging any liability to the assessee after receipt of a notice under this sub-section shall be personally liable to the Assessing Officer or Tax Recovery Officer to the extent of his own liability to the assessee so discharged or to the extent of the assessee's liability for any sum due under this Act, whichever is less.
(x) If the person to whom a notice under this sub-section is sent fails to make payment in pursuance thereof to the Assessing Officer or Tax Recovery Officer, he shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were an arrear of tax due from him, in the manner provided in sections 222 to 225 and the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under section 222.
(4) The Assessing Officer or Tax Recovery Officer may apply to the court in whose custody there is money belonging to the assessee for payment to him of the entire amount of such money, or, if it is more than the tax due, an amount sufficient to discharge the tax.
(5) The Assessing Officer or Tax Recovery Officer may, if so authorised by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner by general or special order, recover any arrears of tax due from an assessee by distraint and sale of his movable property in the manner laid down in the Third Schedule.
C. AUTHORITIES
The authorities concentrate on the garnishee power in section 226(3).
1. Garnishee power under section 226(3) — scope and limits
III ITO, Mangalore v. M. Damodar Bhat (1969) 71 ITR 806 (SC)
Holding The leading authority on the garnishee power: in a proceeding under section 226(3) it is not necessary that the assessee be in default or deemed in default — no such condition is imposed by the sub-section; the provision applies to amounts assessed even under the 1922 Act, ensuring continuity of recovery.
Use Cited for the foundational scope of section 226(3) and the absence of a 'default' pre-condition for a garnishee notice.
U.P. Carbon & Chemicals Ltd. v. TRO (2014) 368 ITR 384 (Allahabad)
Holding Section 226(3) applies to an admitted liability; the TRO cannot adjudicate a bona fide dispute between the garnishee and the assessee, nor can he, on his own, hold that the garnishee's statement on oath was false; questions of quantum of liability belong to the civil court.
Use The standard authority protecting a garnishee who genuinely disputes the debt and limiting the TRO's adjudicatory role.
Vysya Bank Ltd. v. JCIT (1999) 241 ITR 178 (Karnataka)
Holding A garnishee notice presupposes a debtor-creditor relationship and money actually due or held for the assessee; amounts that are not 'money due' (e.g., the mere availability of an overdraft facility) cannot be attached under section 226(3).
Use Cited to resist garnishee notices on overdraft/credit facilities and where no debt subsists.
2. Mandatory intimation and no coercive recovery during stay
UTI Mutual Fund v. ITO (2012) 345 ITR 71 (Bombay)
Holding Recovery by garnishee/attachment must not be coercive while a stay or appeal is pending; the assessee must be given notice and a reasonable opportunity to seek relief before attached funds are withdrawn.
Use The principal authority against premature or unintimated garnishee recovery from bank accounts.