CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | D.—COLLECTION AND RECOVERY
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | D.—COLLECTION AND RECOVERY
Section 231 — Faceless Collection and Recovery of Tax
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live as an enabling power; permits the Central Government to notify a faceless scheme for a wide range of collection-and-recovery functions. The power to issue directions giving effect to the scheme is, however, time-barred after 31 March 2022.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: Central Government may, by notification, make a scheme for faceless exercise of listed functions — lower/nil deduction certificates (s.197), deeming as assessee in default (s.201(1)/206C(6A)), lower collection certificates (s.206C(9)), section 210(3)/(4) orders, waiver of interest / time-to-pay / instalments and 'not in default' treatment under section 220, penalty under section 221, drawing of certificate (s.222), TRO jurisdiction (s.223), stay (s.225), other modes (s.226) and tax clearance (s.230) — through elimination of interface, economies of scale and team-based working with dynamic jurisdiction (231(1)) → power to modify the Act's application to give effect to the scheme, but no direction after 31 March 2022 (231(2) proviso) → notifications to be laid before Parliament (231(3)).
Litigation profile: Untested; no scheme of consequence has been notified and the direction-making window has closed. The candour rule is applied.
A. COMMENTARY
An enabling, and now largely spent, power
Section 231 is the recovery-chapter analogue of the faceless schemes enacted across the Act. It authorises the Central Government to make a faceless scheme covering an unusually wide span of collection-and-recovery functions, from lower-deduction certificates to the drawing of a TRO certificate, with the familiar object of eliminating the interface between authority and taxpayer, achieving economies of scale, and team-based working with dynamic jurisdiction.
The closed window
Critically, the proviso to sub-section (2) bars the issue of any direction (to disapply or modify the Act for giving effect to a scheme) after 31 March 2022. Because the enabling architecture for actually implementing such a scheme has therefore lapsed, and no faceless recovery scheme of consequence has been notified, the provision is presently dormant. The Finance Act, 2026 does not revive or extend it.
Candour note
There is no direct jurisprudence on section 231. The general faceless-scheme jurisprudence — insisting on adherence to the notified procedure and on observance of natural justice (e.g., the line of decisions setting aside faceless orders passed without a mandatory show-cause/draft stage) — supplies only cognate, not section-specific, guidance and is flagged as such.
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.
Faceless collection and recovery of tax.
231. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of issuance of certificate for deduction of income-tax at any lower rates or no deduction of income-tax under section 197, or deeming a person to be an assessee in default under sub-section (1) of section 201 or sub-section (6A) of section 206C, issuance of certificate for lower collection of tax under sub-section (9) of section 206C or passing of order or amended order under sub-section (3) or sub-section
(4) of section 210, or reduction or waiver of the amount of interest paid or payable by an assessee under sub-section (2A), or extending the time for payment or allowing payment by instalment under sub-section
(3), or treating the assessee as not being in default under sub-section (6) or sub-section (7) of section 220, or levy of penalty under section 221, or drawing of certificate by the Tax Recovery Officer under section 222, or jurisdiction of Tax Recovery Officer under section 223, or stay of proceedings in pursuance of certificate and amendment or cancellation thereof by the Tax Recovery Officer under section 225, or other modes of recovery under section 226 or issuance of tax clearance certificate under section 230 so as to impart greater efficiency, transparency and accountability by—
(a) eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing a team-based issuance of certificate for deduction or collection of income-tax at lower rate, or for no deduction, or for deeming a person to be an assessee in default, or for passing of an order or amended order, or extending the time for payment, or allowing payment by instalment, or reduction or waiver of interest, or for treating the assessee as not being in default, or for levy of penalty or for drawing of certificate or stay of proceedings in pursuance of certificate and amendment or cancellation thereof, by, or jurisdiction of, Tax Recovery Officer or other modes of recovery or issuance of tax clearance certificate, with dynamic jurisdiction.
(2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:
Provided that no direction shall be issued after the 31st day of March, 2022.
(3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.
C. AUTHORITIES
Untested enabling provision; candour rule applied. Cognate faceless-scheme jurisprudence is noted as guidance only.
1. Candour note and cognate guidance
No direct case law (provision untested)
Position No faceless collection-and-recovery scheme of consequence has been notified and the direction-making power lapsed on 31 March 2022; there is no section-specific authority.
Use State the candour position; do not over-claim.
Cognate — faceless-scheme natural-justice line (guidance only)
Proposition Decisions on other faceless schemes (assessment/appeal/penalty) hold that the notified procedure and natural justice — including any mandatory show-cause or draft-order stage — must be observed, failing which the order is liable to be set aside. These are cognate, not section-231 authorities.
Use Indicative of how courts would test any future faceless recovery scheme; cite the specific faceless decision relevant to the facts.
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX | D.—COLLECTION AND RECOVERY
Section 231 — Faceless Collection and Recovery of Tax
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live as an enabling power; permits the Central Government to notify a faceless scheme for a wide range of collection-and-recovery functions. The power to issue directions giving effect to the scheme is, however, time-barred after 31 March 2022.
Finance Act, 2026: No amendment by the Finance Act, 2026.
Mechanism: Central Government may, by notification, make a scheme for faceless exercise of listed functions — lower/nil deduction certificates (s.197), deeming as assessee in default (s.201(1)/206C(6A)), lower collection certificates (s.206C(9)), section 210(3)/(4) orders, waiver of interest / time-to-pay / instalments and 'not in default' treatment under section 220, penalty under section 221, drawing of certificate (s.222), TRO jurisdiction (s.223), stay (s.225), other modes (s.226) and tax clearance (s.230) — through elimination of interface, economies of scale and team-based working with dynamic jurisdiction (231(1)) → power to modify the Act's application to give effect to the scheme, but no direction after 31 March 2022 (231(2) proviso) → notifications to be laid before Parliament (231(3)).
Litigation profile: Untested; no scheme of consequence has been notified and the direction-making window has closed. The candour rule is applied.
A. COMMENTARY
An enabling, and now largely spent, power
Section 231 is the recovery-chapter analogue of the faceless schemes enacted across the Act. It authorises the Central Government to make a faceless scheme covering an unusually wide span of collection-and-recovery functions, from lower-deduction certificates to the drawing of a TRO certificate, with the familiar object of eliminating the interface between authority and taxpayer, achieving economies of scale, and team-based working with dynamic jurisdiction.
The closed window
Critically, the proviso to sub-section (2) bars the issue of any direction (to disapply or modify the Act for giving effect to a scheme) after 31 March 2022. Because the enabling architecture for actually implementing such a scheme has therefore lapsed, and no faceless recovery scheme of consequence has been notified, the provision is presently dormant. The Finance Act, 2026 does not revive or extend it.
Candour note
There is no direct jurisprudence on section 231. The general faceless-scheme jurisprudence — insisting on adherence to the notified procedure and on observance of natural justice (e.g., the line of decisions setting aside faceless orders passed without a mandatory show-cause/draft stage) — supplies only cognate, not section-specific, guidance and is flagged as such.
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.
Faceless collection and recovery of tax.
231. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of issuance of certificate for deduction of income-tax at any lower rates or no deduction of income-tax under section 197, or deeming a person to be an assessee in default under sub-section (1) of section 201 or sub-section (6A) of section 206C, issuance of certificate for lower collection of tax under sub-section (9) of section 206C or passing of order or amended order under sub-section (3) or sub-section
(4) of section 210, or reduction or waiver of the amount of interest paid or payable by an assessee under sub-section (2A), or extending the time for payment or allowing payment by instalment under sub-section
(3), or treating the assessee as not being in default under sub-section (6) or sub-section (7) of section 220, or levy of penalty under section 221, or drawing of certificate by the Tax Recovery Officer under section 222, or jurisdiction of Tax Recovery Officer under section 223, or stay of proceedings in pursuance of certificate and amendment or cancellation thereof by the Tax Recovery Officer under section 225, or other modes of recovery under section 226 or issuance of tax clearance certificate under section 230 so as to impart greater efficiency, transparency and accountability by—
(a) eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible;
(b) optimising utilisation of the resources through economies of scale and functional specialisation;
(c) introducing a team-based issuance of certificate for deduction or collection of income-tax at lower rate, or for no deduction, or for deeming a person to be an assessee in default, or for passing of an order or amended order, or extending the time for payment, or allowing payment by instalment, or reduction or waiver of interest, or for treating the assessee as not being in default, or for levy of penalty or for drawing of certificate or stay of proceedings in pursuance of certificate and amendment or cancellation thereof, by, or jurisdiction of, Tax Recovery Officer or other modes of recovery or issuance of tax clearance certificate, with dynamic jurisdiction.
(2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification:
Provided that no direction shall be issued after the 31st day of March, 2022.
(3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.
C. AUTHORITIES
Untested enabling provision; candour rule applied. Cognate faceless-scheme jurisprudence is noted as guidance only.
1. Candour note and cognate guidance
No direct case law (provision untested)
Position No faceless collection-and-recovery scheme of consequence has been notified and the direction-making power lapsed on 31 March 2022; there is no section-specific authority.
Use State the candour position; do not over-claim.
Cognate — faceless-scheme natural-justice line (guidance only)
Proposition Decisions on other faceless schemes (assessment/appeal/penalty) hold that the notified procedure and natural justice — including any mandatory show-cause or draft-order stage — must be observed, failing which the order is liable to be set aside. These are cognate, not section-231 authorities.
Use Indicative of how courts would test any future faceless recovery scheme; cite the specific faceless decision relevant to the facts.