Section 413: certificate by the Tax Recovery Officer

Introduction

Section 413 lets a Tax Recovery Officer draw up an arrears certificate for a defaulting assessee and use prescribed recovery modes. Under the Finance Act, 2026 text, the named modes are attachment and sale of movable or immovable property and appointment of a receiver; the old arrest limb was removed.

Key takeaways

Drawing up the recovery certificate - Section 413(1)

"When an assessee is in default or is deemed to be in default in making a payment of tax, the Tax Recovery Officer may draw up under his signature a statement in such form as may be prescribed specifying the amount of arrears due from the assessee (such statement being herein and in sections 414 to 416 referred to as certificate) and shall proceed to recover from such assessee the amount specified in the certificate by one or more of the modes mentioned below, as per the rules prescribed in this regard-- (a) attachment and sale of movable property of the assessee; (b) attachment and sale of immovable property of the assessee; (c) appointing a receiver for the management of movable and immovable properties of the assessee."

The Tax Recovery Officer may take this action whether or not recovery proceedings have already been taken by any other mode.

The certificate cannot be disputed, but can be cancelled or corrected

The assessee is not entitled to dispute the correctness of any certificate drawn up by the Tax Recovery Officer on any ground.

The Tax Recovery Officer may cancel the certificate if, for any reason, he considers it necessary, or may correct any clerical or arithmetical mistake in it.

Property that counts as the assessee's own for recovery

For this section, the assessee's movable or immovable property includes property transferred, directly or indirectly, on or after 1 June 1973, by the assessee to his spouse, minor child, son's wife, or son's minor child, without adequate consideration, and which is held by or stands in the name of any of those persons.

Property transferred to a minor child or a son's minor child continues to be treated as the assessee's own property (for recovering arrears relating to a period before the child attained majority) even after that child attains majority.

Step-by-step flow for recovery through a certificate under Section 413

1. 1

   Is the assessee in default, or deemed to be in default, in paying tax?

   • No: Section 413 does not apply.
   • Yes: Go to the next step.
2. 2

   The Tax Recovery Officer draws up the certificate

   It is a statement under his signature, in the prescribed form, specifying the arrears due (Section 413(1)). He may act whether or not other recovery modes have been taken (Section 413(2)).

3. 3

   Choose the mode of recovery

   One or more of: attachment and sale of movable property, attachment and sale of immovable property, or appointing a receiver to manage the properties. The procedure follows the rules prescribed for this purpose.

4. 4

   Identify the assessee's property

   Under Section 413(5) it includes property transferred directly or indirectly on or after 1 June 1973 to the spouse, minor child, son's wife or son's minor child otherwise than for adequate consideration, and held by or standing in the name of that person. Property so transferred to a minor child or son's minor child stays included even after majority, for arrears relating to earlier periods.

5. 5

   Can the certificate be challenged or changed?

   The assessee cannot dispute its correctness on any ground (Section 413(3)). The Tax Recovery Officer may cancel it if he considers it necessary, or correct a clerical or arithmetical mistake (Section 413(4)).

Practical checklist

Glossary

Recovery certificate

The Tax Recovery Officer’s signed statement of arrears for recovery under section 413.

Receiver

A person appointed under the amended recovery mode to manage the assessee’s movable or immovable property.

Frequently asked questions