Chapter XIX - Collection and Recovery of Tax
Section 415
Section 415: stay, amendment or cancellation of a recovery certificate
Section 415 gives the Tax Recovery Officer power to pause recovery by granting time to pay, and requires the recovery certificate to be adjusted if the underlying tax demand is later reduced through an appeal or other proceeding.
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This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) The Tax Recovery Officer may grant time for the payment of any tax and, till the expiry of such time, shall stay the recovery proceedings for such tax.
(2) Where a certificate has been drawn up and subsequently, the amount of the outstanding demand is reduced as a result of the order giving rise to the said demand, being modified in an appeal or other proceeding under this Act, the Tax Recovery Officer shall— (a) if the order is the subject-matter of further proceeding under this Act, stay the recovery of such part of the amount specified in the certificate as pertains to the said reduction for the period for which the appeal or other proceeding remains pending; or (b) if the order which was the subject-matter of such appeal or other proceeding has become final and conclusive, amend the certificate, or cancel it.
Introduction
The Tax Recovery Officer may give time to pay tax and stay recovery until that time expires.
Where an appeal or other proceeding reduces a demand after a recovery certificate has been drawn up, section 415 describes a stay while further proceedings continue, or amendment or cancellation when the order is final.
Key takeaways
Time to pay
The Tax Recovery Officer may grant time and must stay recovery until the granted time expires.
Demand reduced during further proceedings
Recovery of the reduced part is stayed for the pendency of the further proceeding.
Final reduction
When the modifying order is final and conclusive, the certificate is amended or cancelled.
Time to pay and temporary stay
The Tax Recovery Officer may grant time to pay tax. Recovery proceedings for that tax must be stayed until the granted time expires. Keep the officer’s grant and expiry date with the recovery certificate.
Reduction while further proceedings remain pending
If the demand supporting a drawn certificate is reduced after an appeal or other proceeding but the underlying order is in further proceedings, the officer must stay recovery of the reduced part while those proceedings remain pending. This rule concerns the reduced part, not automatically the entire certificate.
Final reduction and certificate correction
Once the order under appeal or other proceeding becomes final and conclusive, the officer must amend or cancel the certificate to reflect the reduction. Reconcile the final order, revised demand and certificate amount.
Step-by-step flow for stay, amendment or cancellation under Section 415
- 1
Has the Tax Recovery Officer granted time for payment of the tax?
Under Section 415(1) he may grant time, and must stay the recovery proceedings for that tax until the time expires.
- 2
After the certificate was drawn up, was the outstanding demand reduced because the order giving rise to it was modified in an appeal or other proceeding under the Act?
- No: The certificate continues for the full amount, subject to any time granted under Section 415(1).
- Yes: Go to the next step.
- 3
Is the order the subject-matter of a further proceeding under the Act?
- Yes: Stay recovery of the part of the certificate amount that relates to the reduction, for as long as the appeal or proceeding is pending (Section 415(2)(a)). Go to step 4 once the order becomes final.
- No, the order has become final and conclusive: Go to the next step.
- 4
Amend or cancel the certificate
Once the order has become final and conclusive, the Tax Recovery Officer amends the certificate, or cancels it (Section 415(2)(b)).
Practical checklist
Do
- Give the Tax Recovery Officer the order reducing the demand and the current appeal status.
- Check whether the modification is still under a further proceeding or has become final.
Avoid
- Do not assume a pending appeal automatically cancels the recovery certificate.
Illustrative example
Worked example: demand reduced in appeal
Hypothetical facts (illustration only, not a real taxpayer): A certificate is drawn up for assumed arrears of ₹10,00,000. An appellate order modifies the assessment and the demand falls to ₹6,50,000. That order is the subject of a further appeal under the Act, which is later decided and becomes final with the demand at ₹6,50,000.
Size of reduction
₹10,00,000 − ₹6,50,000 = ₹3,50,000.
While the further appeal is pending
Under Section 415(2)(a) the Tax Recovery Officer stays recovery of the ₹3,50,000 that relates to the reduction. The ₹6,50,000 balance is not covered by this stay.
After the order becomes final
Under Section 415(2)(b) he amends the certificate to ₹6,50,000.
Time to pay
If the assessee asks for time and the officer grants it, recovery of the tax is stayed until that time expires (Section 415(1)).
Outcome
- The certificate is amended to ₹6,50,000 once the order is final.
- Had the demand been reduced to nil, the certificate would be cancelled under Section 415(2)(b).
Frequently asked questions
Can the Tax Recovery Officer pause recovery proceedings?
Yes - Section 415(1) lets the Tax Recovery Officer grant time for payment, and requires him to stay recovery proceedings for that tax until the granted time expires.
What happens to a recovery certificate if the tax demand is reduced on appeal?
If the reducing order is still under further appeal or proceeding, the corresponding part of the certified recovery amount is stayed while that appeal is pending. If the reducing order has become final, the certificate is amended or cancelled.
Need help applying this provision to your situation?
Get help staying or amending a tax recovery certificateLast updated 9 October 2026