Stay of proceedings in pursuance of certificate and amendment or cancellation thereof

Section 415 — STAY OF PROCEEDINGS IN PURSUANCE OF CERTIFICATE AND AMENDMENT OR CANCELLATION THEREOF

Section 415 of the Income-tax Act, 2025 corresponds to s. 225 of the Income-tax Act, 1961.

STATUTORY ARCHITECTURE

Section 415 governs recovery proceedings in two situations. First, where the Tax Recovery Officer grants time for payment of any tax, recovery proceedings are stayed until that time expires. Second, where a certificate has been drawn up and the outstanding demand is later reduced because the order giving rise to the demand has been modified in an appeal or other proceeding under the Act. The consequence then depends on the status of that order. If it is the subject-matter of further proceeding, recovery of the reduced part is stayed while the appeal or other proceeding is pending; if it has become final and conclusive, the certificate is amended or cancelled.

KEY ELEMENTS

• Sub-section (1): the Tax Recovery Officer may grant time for the payment of any tax and, till the expiry of that time, shall stay the recovery proceedings for that tax.
• Sub-section (2), trigger: a certificate has been drawn up, and subsequently the outstanding demand is reduced as a result of the order giving rise to the demand being modified in an appeal or other proceeding under the Act.
• Sub-section (2)(a): if the order is the subject-matter of further proceeding under the Act, the Tax Recovery Officer shall stay recovery of such part of the amount specified in the certificate as pertains to the reduction, for the period for which the appeal or other proceeding remains pending.
• Sub-section (2)(b): if the order which was the subject-matter of the appeal or other proceeding has become final and conclusive, the Tax Recovery Officer shall amend the certificate, or cancel it.

CHANGES FROM THE 1961 ACT

The corresponding provision is s. 225 of the 1961 Act. Sub-section (1) is substantively the same, though "It shall be lawful for the Tax Recovery Officer to grant time" becomes "may grant time". The 1961 Act dealt with the reduced-demand situation in two separate sub-sections: s. 225(2) of the 1961 Act (stay where the order is the subject-matter of further proceeding) and s. 225(3) of the 1961 Act (amendment or cancellation once the order has become final and conclusive). Section 415 merges them into a single sub-section (2) with a common trigger and two alternative clauses. The words "as the case may be" after "amend the certificate, or cancel it" in s. 225(3) of the 1961 Act do not appear in the 2025 text. The substance is otherwise the same.

PRACTITIONER NOTES

• Once time for payment is granted under sub-section (1), the stay of recovery proceedings is mandatory ("shall stay") until that time expires.
• The stay under sub-section (2)(a) is limited to the part of the amount in the certificate that pertains to the reduction; it does not extend to the balance of the certificate.
• Amendment or cancellation of the certificate under sub-section (2)(b) arises only when the order has become final and conclusive.

CROSS-REFERENCES

• The section names no other section; it refers to appeals or other proceedings "under this Act".
• s. 225 of the 1961 Act — the corresponding provision.