CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | D.—COLLECTION AND RECOVERY
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | D.—COLLECTION AND RECOVERY
Section 227 — Recovery Through State Government
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live but rarely invoked; enables recovery of tax along with municipal tax or local rate where recovery in an area has been entrusted to a State Government under Article 258(1) of the Constitution.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: If recovery of tax in an area is entrusted to a State Government under Article 258(1) → the State Government may direct that the tax be recovered with, and as an addition to, the municipal tax or local rate, by the same person and in the same manner.
Litigation profile: Negligible litigation; an enabling, federal-cooperation provision that is seldom used in practice.
A. COMMENTARY
A federal-cooperation device
Section 227 is a facilitative provision resting on Article 258(1) of the Constitution, under which the President may entrust functions of the Union to a State Government. Where recovery of income-tax in an area has been so entrusted, the State may piggy-back tax recovery on its existing municipal-tax or local-rate machinery — collecting the tax through the same officers and in the same manner, as an addition to the local levy. The provision is an alternative channel and does not displace the certificate and 'other modes' machinery.
Litigation note
There is effectively no significant judicial pronouncement turning on section 227; it is invoked rarely and the candour rule is applied.
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.
Recovery through State Government.
227. If the recovery of tax in any area has been entrusted to a State Government under clause (1) of article 258 of the Constitution, the State Government may direct, with respect to that area or any part thereof; that tax shall be recovered therein with, and as an addition to, any municipal tax or local rate, by the same person and in the same manner as the municipal tax or local rate is recovered.
C. AUTHORITIES
No section-specific authority of significance; the candour rule is applied.
1. Candour note
No direct case law
Position Section 227 is an enabling, seldom-used provision; there is no significant reported decision construing it. Disputes about recovery are decided under the certificate (s.222 / Second Schedule) and 'other modes' (s.226) provisions.
Use State the candour position; do not cite inapposite authority.
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | D.—COLLECTION AND RECOVERY
Section 227 — Recovery Through State Government
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live but rarely invoked; enables recovery of tax along with municipal tax or local rate where recovery in an area has been entrusted to a State Government under Article 258(1) of the Constitution.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: If recovery of tax in an area is entrusted to a State Government under Article 258(1) → the State Government may direct that the tax be recovered with, and as an addition to, the municipal tax or local rate, by the same person and in the same manner.
Litigation profile: Negligible litigation; an enabling, federal-cooperation provision that is seldom used in practice.
A. COMMENTARY
A federal-cooperation device
Section 227 is a facilitative provision resting on Article 258(1) of the Constitution, under which the President may entrust functions of the Union to a State Government. Where recovery of income-tax in an area has been so entrusted, the State may piggy-back tax recovery on its existing municipal-tax or local-rate machinery — collecting the tax through the same officers and in the same manner, as an addition to the local levy. The provision is an alternative channel and does not displace the certificate and 'other modes' machinery.
Litigation note
There is effectively no significant judicial pronouncement turning on section 227; it is invoked rarely and the candour rule is applied.
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.
Recovery through State Government.
227. If the recovery of tax in any area has been entrusted to a State Government under clause (1) of article 258 of the Constitution, the State Government may direct, with respect to that area or any part thereof; that tax shall be recovered therein with, and as an addition to, any municipal tax or local rate, by the same person and in the same manner as the municipal tax or local rate is recovered.
C. AUTHORITIES
No section-specific authority of significance; the candour rule is applied.
1. Candour note
No direct case law
Position Section 227 is an enabling, seldom-used provision; there is no significant reported decision construing it. Disputes about recovery are decided under the certificate (s.222 / Second Schedule) and 'other modes' (s.226) provisions.
Use State the candour position; do not cite inapposite authority.