CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - E.-TAX PAYABLE UNDER PROVISIONAL ASSESSMENT
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - E.-TAX PAYABLE UNDER PROVISIONAL ASSESSMENT
Section 233 - Recovery of Tax Payable Under Provisional Assessment
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Status: OMITTED. Section 233 was omitted by the Taxation Laws (Amendment) Act, 1970, with effect from 1 April 1971. It was the sole section in Part E of Chapter XVII ("Tax payable under provisional assessment"). Operative window: 1 April 1962 to 31 March 1971.
Finance Act, 2026: No amendment. The section has stood omitted for over five decades; the Finance Act, 2026 does not revive, re-insert or otherwise touch it.
Companion provisions: Section 141 ("Provisional assessment") - the charging/assessment counterpart - was omitted by the same Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971. Section 141A ("Provisional assessment for refund") was omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
Litigation profile: No reported decision construes section 233 itself. Being a pure machinery/recovery provision tied to the now-omitted section 141, the relevant jurisprudence is on (a) the nature and limits of a provisional assessment and (b) the recovery code into which the section fed. Candour rule applied.
A. SECTION COMMENTARY
1. Placement and function within Chapter XVII
Chapter XVII of the Income-tax Act, 1961 ("Collection and Recovery of Tax") is divided into Parts. Part E carried the heading "Tax payable under provisional assessment" and contained a single provision - section 233, marginally headed "Recovery of tax payable under provisional assessment". The section was a collection-and-recovery counterpart to the assessment machinery in section 141. A provisional assessment made by the Income-tax Officer under section 141 generated a demand for tax; section 233 located that demand within the recovery code, so that tax found provisionally due could be collected and, in default, recovered through the ordinary modes prescribed in Chapter XVII. In structure the Act thus paired a summary determination (section 141, in Chapter XIV, Procedure for Assessment) with a dedicated recovery anchor (section 233, in Chapter XVII).
2. What a provisional assessment was
Section 141, as it stood until 1 April 1971, empowered the Income-tax Officer, at any time after receipt of a return under section 139, to make - "in a summary manner" - a provisional assessment of the tax payable on the basis of the return and the accounts and documents accompanying it, giving due effect to depreciation allowance and to losses carried forward. The object was purely to accelerate collection: the Revenue could raise and collect tax on the returned figures without waiting for the often-protracted regular assessment under section 143/144. A provisional assessment was, by its nature, interim. It did not bind either the assessee or the Department; the tax provisionally determined was liable to adjustment against the tax found due on regular assessment; and - by express statutory provision - no appeal lay against a provisional assessment.
3. Why the section was omitted (1 April 1971)
The Taxation Laws (Amendment) Act, 1970 recast the machinery for early collection of tax on the returned income. It strengthened the self-assessment scheme under section 140A, under which the assessee himself computes the tax due on the basis of his return and pays it before, or at the time of, furnishing the return. Once the burden of computing and paying tax on the return shifted to the assessee at the threshold, the officer-driven provisional assessment under section 141 became otiose. The Legislature therefore omitted section 141 and, with it, its recovery anchor, section 233, both with effect from 1 April 1971. From that date there is no "provisional assessment", hence no "tax payable under provisional assessment", and no occasion for a dedicated recovery section: any tax on the return is recovered through the general machinery - notice of demand under section 156 and the modes of recovery in sections 220 to 232.
4. Statutory lineage
The provisional-assessment idea descends from section 23B of the Indian Income-tax Act, 1922 (provisional assessment), recovery whereunder ran through sections 29, 45 and 46 of that Act. On the repeal of the 1922 Act, the scheme was carried into the 1961 Act as section 141 (assessment limb) read with section 233 (recovery limb). After the 1971 omission, the functional successors are section 140A (self-assessment) and the summary processing/intimation under section 143(1). Under the Income-tax Act, 2025 the same architecture continues - self-computation on the return and processing of the return - with no separate provisional-assessment recovery provision, so that section 233 has no analogue in the new Act either.
5. Effect of the omission and the savings position
Omission operates prospectively. Provisional assessments validly made between 1 April 1962 and 31 March 1971, and recovery steps taken in respect of them, were not disturbed by the omission; rights and liabilities that had accrued were preserved by the general savings rule in section 6 of the General Clauses Act, 1897, subject to anything to the contrary in the amending Act. In practice, however, section 233 spawned no independent body of reported decisions of its own. It was a machinery provision: recovery of provisionally-assessed tax raised no special question distinct from recovery of any other demand under the Act, and turned on the ordinary recovery principles - a valid and subsisting notice of demand, default, and resort to the prescribed modes. The interesting litigation gathered, instead, around the assessment limb (section 141 / section 23B) and around the general recovery code. That jurisprudence is collected below, with candour as to its cognate (rather than direct) character.
B. STATUTORY POSITION (verbatim text)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no amendment to this Part or section. The editorial "[Omitted...]" note is that of the Legislature. The marginal heading ("Recovery of tax payable under provisional assessment") and the Part heading ("E.—Tax payable under provisional assessment") are reproduced as printed in the bare Act.
E.—Tax payable under provisional assessment
Recovery of tax payable under provisional assessment.
233. [Omitted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.]
C. AUTHORITIES
Candour note. There is no reported judgment construing section 233. The section was a recovery anchor for tax determined under the now-omitted section 141, removed in 1971; recovery of provisionally-assessed tax raised no question peculiar to itself. Equally, because the section was a machinery provision and was omitted early, there is no High Court or Income-tax Appellate Tribunal decision interpreting its language; the practical forum for resisting a provisional assessment was the writ jurisdiction of the High Court under Article 226 (illustrated by Jaipur Udyog Ltd., below, which began as writ petitions in the Rajasthan High Court before reaching the Supreme Court). The authorities that follow are therefore Supreme Court decisions which are genuinely cognate - they fix the nature and limits of the provisional assessment that section 233 enforced, and the recovery machinery into which the section fed - and are offered as such, not as direct authority on section 233.
Cluster 1 - Nature and limits of the levy that section 233 enforced (provisional assessment)
Jaipur Udyog Ltd. v. Commissioner of Income-tax, Delhi & Rajasthan - [1969] 71 ITR 799 (SC); AIR 1969 SC 470; (1969) 2 SCR 193
Statute: Section 141 of the Income-tax Act, 1961 (provisional assessment), read with section 210(3) (advance tax).
Facts: For assessment year 1963-64 the company returned its income after setting off Rs. 1,03,03,935 of carried-forward losses. The Income-tax Officer, making a provisional assessment under section 141, allowed only Rs. 39,89,731 of the claimed loss, raised a provisional demand of Rs. 8,73,873 and levied penalty for default. He also raised an advance-tax demand under section 210(3). The company challenged both by writ petitions in the High Court of Rajasthan.
Held: A provisional assessment under section 141 is a summary proceeding. In that jurisdiction the Income-tax Officer must broadly give effect to the return and the allowances it discloses; he cannot use the summary power to adjudicate debatable or disputed questions - such as the quantum of carried-forward loss available for set-off - against the assessee. A demand for advance tax under section 210(3) can be founded only upon a valid provisional (or regular) assessment. The provisional assessment binds neither side and the tax is liable to be adjusted on regular assessment; no appeal lies against it.
Relevance: The leading exposition of the levy whose recovery section 233 secured. It marks out what could validly be "tax payable under provisional assessment" in the first place - a summary figure flowing from the return, not the product of contested adjudication - and thereby the outer limits of any recovery that section 233 could support.
Income-tax Officer, District II(II), Kanpur v. Mani Ram - [1969] 72 ITR 203 (SC)
Statute: Section 23B (provisional assessment) read with section 18A(3) of the Indian Income-tax Act, 1922 - the cognate predecessor of section 141.
Facts: The assessees were provisionally assessed under section 23B; the question was whether the word "assessed" in section 18A(3) (attracting interest) took in a provisional assessment, or only a regular assessment under section 23.
Held: The word "assessed" must be read in its ordinary sense as including every kind of assessment, including a provisional assessment under section 23B. Parliament, while making consequential amendments to section 18A on the introduction of section 23B, took no step to confine "assessed" to regular assessments. A provisional assessment is therefore a genuine assessment carrying real fiscal consequences.
Relevance: Confirms that provisional assessment was not a mere paper exercise but a true determination of tax with statutory consequences attached. That is precisely why the Legislature thought it necessary to provide a recovery anchor (section 233 in the 1961 Act): a provisionally-assessed sum was a real, recoverable demand.
Cluster 2 - The recovery machinery into which section 233 fed
Income-tax Officer, Kolar Circle v. Seghu Buchiah Setty - [1964] 52 ITR 538 (SC)
Statute: Sections 29, 45 and 46 of the Indian Income-tax Act, 1922 (notice of demand, default and recovery) - cognate to sections 156 and 220-232 of the 1961 Act.
Facts: Tax assessed under section 23(4) was demanded by notice under section 29; on the assessee's default a recovery certificate issued under section 46(2). The demand was later substantially reduced in appeal; the Officer simply informed the assessee of the reduced figure without issuing a fresh notice of demand.
Held: Recovery must rest on a valid and subsisting notice of demand. Where the demand is varied on appeal, the original notice cannot support continued recovery of the altered sum without fresh steps; the assessee could not be treated as a defaulter on the strength of the superseded notice.
Relevance: States the foundational principle of the recovery code into which section 233 placed provisionally-assessed tax - that a live notice of demand underpins every recovery. (The decision led Parliament to enact the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964.) It governs recovery of any demand under the Act, a demand raised on provisional assessment included.
Builders Supply Corporation v. Union of India - [1965] 56 ITR 91 (SC)
Statute: Doctrine of priority of State (Crown) debts in relation to recovery of tax arrears; section 46 of the 1922 Act.
Facts: A competition between a private decree-holder and the Union of India, which claimed that arrears of income-tax due from the common debtor had priority over the decretal debt.
Held: The common-law doctrine of priority of Crown (State) debts is part of the law in force in India and entitles the State to priority for arrears of tax over ordinary unsecured debts, save where displaced by statute.
Relevance: Supplies the substantive backdrop to Chapter XVII recovery. Tax provisionally assessed and anchored for recovery by section 233 enjoyed the same recovery armoury - including the priority doctrine - as any other tax demand, reinforcing that section 233 added no special recovery law of its own but merely brought provisional-assessment tax within the general code.
Cluster 3 - Continuity: why no dedicated recovery section survived the move to self-assessment
Modi Industries Ltd. v. Commissioner of Income-tax - [1995] 216 ITR 759 (SC)
Statute: Scheme of advance tax, tax paid before regular assessment, and adjustment on regular assessment; sections 140A, 143, 214, 215, 219, 244.
Facts: A five-Judge Bench examination of when tax is treated as "paid", and how advance tax and other pre-regular-assessment payments are adjusted once the regular assessment is made.
Held: Amounts collected before regular assessment - advance tax and cognate pre-assessment payments - are interim; they are carried into, and adjusted against, the liability finally determined on regular assessment, with statutory consequences (interest, refund) following from that adjustment.
Relevance: Explains, in modern terms, the very mechanism that made section 141/section 233 dispensable. Once self-assessment under section 140A collected tax on the return at the threshold and that payment merged in the regular assessment, a separate provisional-assessment-and-recovery limb served no purpose - which is why the Legislature could omit both section 141 and section 233 in 1971 without leaving any gap in collection.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Section 233 having been omitted with effect from 1 April 1971, the candour rule is observed throughout: the absence of any decision directly construing the omitted recovery provision is stated openly, and only genuinely cognate Supreme Court authority - on the provisional assessment that the section enforced, and on the recovery machinery into which it fed - is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - E.-TAX PAYABLE UNDER PROVISIONAL ASSESSMENT
Section 233 - Recovery of Tax Payable Under Provisional Assessment
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Status: OMITTED. Section 233 was omitted by the Taxation Laws (Amendment) Act, 1970, with effect from 1 April 1971. It was the sole section in Part E of Chapter XVII ("Tax payable under provisional assessment"). Operative window: 1 April 1962 to 31 March 1971.
Finance Act, 2026: No amendment. The section has stood omitted for over five decades; the Finance Act, 2026 does not revive, re-insert or otherwise touch it.
Companion provisions: Section 141 ("Provisional assessment") - the charging/assessment counterpart - was omitted by the same Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971. Section 141A ("Provisional assessment for refund") was omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
Litigation profile: No reported decision construes section 233 itself. Being a pure machinery/recovery provision tied to the now-omitted section 141, the relevant jurisprudence is on (a) the nature and limits of a provisional assessment and (b) the recovery code into which the section fed. Candour rule applied.
A. SECTION COMMENTARY
1. Placement and function within Chapter XVII
Chapter XVII of the Income-tax Act, 1961 ("Collection and Recovery of Tax") is divided into Parts. Part E carried the heading "Tax payable under provisional assessment" and contained a single provision - section 233, marginally headed "Recovery of tax payable under provisional assessment". The section was a collection-and-recovery counterpart to the assessment machinery in section 141. A provisional assessment made by the Income-tax Officer under section 141 generated a demand for tax; section 233 located that demand within the recovery code, so that tax found provisionally due could be collected and, in default, recovered through the ordinary modes prescribed in Chapter XVII. In structure the Act thus paired a summary determination (section 141, in Chapter XIV, Procedure for Assessment) with a dedicated recovery anchor (section 233, in Chapter XVII).
2. What a provisional assessment was
Section 141, as it stood until 1 April 1971, empowered the Income-tax Officer, at any time after receipt of a return under section 139, to make - "in a summary manner" - a provisional assessment of the tax payable on the basis of the return and the accounts and documents accompanying it, giving due effect to depreciation allowance and to losses carried forward. The object was purely to accelerate collection: the Revenue could raise and collect tax on the returned figures without waiting for the often-protracted regular assessment under section 143/144. A provisional assessment was, by its nature, interim. It did not bind either the assessee or the Department; the tax provisionally determined was liable to adjustment against the tax found due on regular assessment; and - by express statutory provision - no appeal lay against a provisional assessment.
3. Why the section was omitted (1 April 1971)
The Taxation Laws (Amendment) Act, 1970 recast the machinery for early collection of tax on the returned income. It strengthened the self-assessment scheme under section 140A, under which the assessee himself computes the tax due on the basis of his return and pays it before, or at the time of, furnishing the return. Once the burden of computing and paying tax on the return shifted to the assessee at the threshold, the officer-driven provisional assessment under section 141 became otiose. The Legislature therefore omitted section 141 and, with it, its recovery anchor, section 233, both with effect from 1 April 1971. From that date there is no "provisional assessment", hence no "tax payable under provisional assessment", and no occasion for a dedicated recovery section: any tax on the return is recovered through the general machinery - notice of demand under section 156 and the modes of recovery in sections 220 to 232.
4. Statutory lineage
The provisional-assessment idea descends from section 23B of the Indian Income-tax Act, 1922 (provisional assessment), recovery whereunder ran through sections 29, 45 and 46 of that Act. On the repeal of the 1922 Act, the scheme was carried into the 1961 Act as section 141 (assessment limb) read with section 233 (recovery limb). After the 1971 omission, the functional successors are section 140A (self-assessment) and the summary processing/intimation under section 143(1). Under the Income-tax Act, 2025 the same architecture continues - self-computation on the return and processing of the return - with no separate provisional-assessment recovery provision, so that section 233 has no analogue in the new Act either.
5. Effect of the omission and the savings position
Omission operates prospectively. Provisional assessments validly made between 1 April 1962 and 31 March 1971, and recovery steps taken in respect of them, were not disturbed by the omission; rights and liabilities that had accrued were preserved by the general savings rule in section 6 of the General Clauses Act, 1897, subject to anything to the contrary in the amending Act. In practice, however, section 233 spawned no independent body of reported decisions of its own. It was a machinery provision: recovery of provisionally-assessed tax raised no special question distinct from recovery of any other demand under the Act, and turned on the ordinary recovery principles - a valid and subsisting notice of demand, default, and resort to the prescribed modes. The interesting litigation gathered, instead, around the assessment limb (section 141 / section 23B) and around the general recovery code. That jurisprudence is collected below, with candour as to its cognate (rather than direct) character.
B. STATUTORY POSITION (verbatim text)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no amendment to this Part or section. The editorial "[Omitted...]" note is that of the Legislature. The marginal heading ("Recovery of tax payable under provisional assessment") and the Part heading ("E.—Tax payable under provisional assessment") are reproduced as printed in the bare Act.
E.—Tax payable under provisional assessment
Recovery of tax payable under provisional assessment.
233. [Omitted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.]
C. AUTHORITIES
Candour note. There is no reported judgment construing section 233. The section was a recovery anchor for tax determined under the now-omitted section 141, removed in 1971; recovery of provisionally-assessed tax raised no question peculiar to itself. Equally, because the section was a machinery provision and was omitted early, there is no High Court or Income-tax Appellate Tribunal decision interpreting its language; the practical forum for resisting a provisional assessment was the writ jurisdiction of the High Court under Article 226 (illustrated by Jaipur Udyog Ltd., below, which began as writ petitions in the Rajasthan High Court before reaching the Supreme Court). The authorities that follow are therefore Supreme Court decisions which are genuinely cognate - they fix the nature and limits of the provisional assessment that section 233 enforced, and the recovery machinery into which the section fed - and are offered as such, not as direct authority on section 233.
Cluster 1 - Nature and limits of the levy that section 233 enforced (provisional assessment)
Jaipur Udyog Ltd. v. Commissioner of Income-tax, Delhi & Rajasthan - [1969] 71 ITR 799 (SC); AIR 1969 SC 470; (1969) 2 SCR 193
Statute: Section 141 of the Income-tax Act, 1961 (provisional assessment), read with section 210(3) (advance tax).
Facts: For assessment year 1963-64 the company returned its income after setting off Rs. 1,03,03,935 of carried-forward losses. The Income-tax Officer, making a provisional assessment under section 141, allowed only Rs. 39,89,731 of the claimed loss, raised a provisional demand of Rs. 8,73,873 and levied penalty for default. He also raised an advance-tax demand under section 210(3). The company challenged both by writ petitions in the High Court of Rajasthan.
Held: A provisional assessment under section 141 is a summary proceeding. In that jurisdiction the Income-tax Officer must broadly give effect to the return and the allowances it discloses; he cannot use the summary power to adjudicate debatable or disputed questions - such as the quantum of carried-forward loss available for set-off - against the assessee. A demand for advance tax under section 210(3) can be founded only upon a valid provisional (or regular) assessment. The provisional assessment binds neither side and the tax is liable to be adjusted on regular assessment; no appeal lies against it.
Relevance: The leading exposition of the levy whose recovery section 233 secured. It marks out what could validly be "tax payable under provisional assessment" in the first place - a summary figure flowing from the return, not the product of contested adjudication - and thereby the outer limits of any recovery that section 233 could support.
Income-tax Officer, District II(II), Kanpur v. Mani Ram - [1969] 72 ITR 203 (SC)
Statute: Section 23B (provisional assessment) read with section 18A(3) of the Indian Income-tax Act, 1922 - the cognate predecessor of section 141.
Facts: The assessees were provisionally assessed under section 23B; the question was whether the word "assessed" in section 18A(3) (attracting interest) took in a provisional assessment, or only a regular assessment under section 23.
Held: The word "assessed" must be read in its ordinary sense as including every kind of assessment, including a provisional assessment under section 23B. Parliament, while making consequential amendments to section 18A on the introduction of section 23B, took no step to confine "assessed" to regular assessments. A provisional assessment is therefore a genuine assessment carrying real fiscal consequences.
Relevance: Confirms that provisional assessment was not a mere paper exercise but a true determination of tax with statutory consequences attached. That is precisely why the Legislature thought it necessary to provide a recovery anchor (section 233 in the 1961 Act): a provisionally-assessed sum was a real, recoverable demand.
Cluster 2 - The recovery machinery into which section 233 fed
Income-tax Officer, Kolar Circle v. Seghu Buchiah Setty - [1964] 52 ITR 538 (SC)
Statute: Sections 29, 45 and 46 of the Indian Income-tax Act, 1922 (notice of demand, default and recovery) - cognate to sections 156 and 220-232 of the 1961 Act.
Facts: Tax assessed under section 23(4) was demanded by notice under section 29; on the assessee's default a recovery certificate issued under section 46(2). The demand was later substantially reduced in appeal; the Officer simply informed the assessee of the reduced figure without issuing a fresh notice of demand.
Held: Recovery must rest on a valid and subsisting notice of demand. Where the demand is varied on appeal, the original notice cannot support continued recovery of the altered sum without fresh steps; the assessee could not be treated as a defaulter on the strength of the superseded notice.
Relevance: States the foundational principle of the recovery code into which section 233 placed provisionally-assessed tax - that a live notice of demand underpins every recovery. (The decision led Parliament to enact the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964.) It governs recovery of any demand under the Act, a demand raised on provisional assessment included.
Builders Supply Corporation v. Union of India - [1965] 56 ITR 91 (SC)
Statute: Doctrine of priority of State (Crown) debts in relation to recovery of tax arrears; section 46 of the 1922 Act.
Facts: A competition between a private decree-holder and the Union of India, which claimed that arrears of income-tax due from the common debtor had priority over the decretal debt.
Held: The common-law doctrine of priority of Crown (State) debts is part of the law in force in India and entitles the State to priority for arrears of tax over ordinary unsecured debts, save where displaced by statute.
Relevance: Supplies the substantive backdrop to Chapter XVII recovery. Tax provisionally assessed and anchored for recovery by section 233 enjoyed the same recovery armoury - including the priority doctrine - as any other tax demand, reinforcing that section 233 added no special recovery law of its own but merely brought provisional-assessment tax within the general code.
Cluster 3 - Continuity: why no dedicated recovery section survived the move to self-assessment
Modi Industries Ltd. v. Commissioner of Income-tax - [1995] 216 ITR 759 (SC)
Statute: Scheme of advance tax, tax paid before regular assessment, and adjustment on regular assessment; sections 140A, 143, 214, 215, 219, 244.
Facts: A five-Judge Bench examination of when tax is treated as "paid", and how advance tax and other pre-regular-assessment payments are adjusted once the regular assessment is made.
Held: Amounts collected before regular assessment - advance tax and cognate pre-assessment payments - are interim; they are carried into, and adjusted against, the liability finally determined on regular assessment, with statutory consequences (interest, refund) following from that adjustment.
Relevance: Explains, in modern terms, the very mechanism that made section 141/section 233 dispensable. Once self-assessment under section 140A collected tax on the return at the threshold and that payment merged in the regular assessment, a separate provisional-assessment-and-recovery limb served no purpose - which is why the Legislature could omit both section 141 and section 233 in 1971 without leaving any gap in collection.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Section 233 having been omitted with effect from 1 April 1971, the candour rule is observed throughout: the absence of any decision directly construing the omitted recovery provision is stated openly, and only genuinely cognate Supreme Court authority - on the provisional assessment that the section enforced, and on the recovery machinery into which it fed - is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.