The Income-Tax Act, 1961

Part III

Attachment and Sale of Immovable Property

Attachment

48. Attachment.-

Attachment of the immovable property of the defaulter shall be made by an order prohibiting the defaulter from transferring or charging the property in any way and prohibiting all persons from taking any benefit under such transfer or charge.

49. Service of notice of attachment.- A copy of the order of attachment shall be served on the defaulter.

50. Proclamation of attachment.-

The order of attachment shall be proclaimed at some place on or adjacent to the property attached by beat of drum or other customary mode, and a copy of the order shall be affixed on a conspicuous part of the property and on the notice board of the office of the Tax Recovery Officer.

51. Attachment to relate back from the date of service of notice.-

Where any immovable property is attached under this Schedule, the attachment shall relate back to, and take effect from, the date on which the notice to pay the arrears, issued under this Schedule, was served upon the defaulter.

Sale

52. Sale and proclamation of sale.-

(1) The Tax Recovery Officer may direct that any immovable property which has been attached, or such portion thereof as may seem necessary to satisfy the certificate, shall be sold.

(2) Where any immovable property is ordered to be sold, the Tax Recovery Officer shall cause a proclamation of the intended sale to be made in the language of the district.

53. Contents of proclamation.-

A proclamation of sale of immovable property shall be drawn up after notice to the defaulter, and shall state the time and place of sale, and shall specify, as fairly and accurately as possible,-

(a) the property to be sold;

(b) the revenue, if any, assessed upon the property or any part thereof;

(c) the amount for the recovery of which the sale is ordered; 1***

²[(cc) the reserve price, if any, below which the property may not be sold; and]

(d) any other thing which the Tax Recovery Officer considers it material for a purchaser to know, in order to judge the nature and value of the property.

54. Mode of making proclamation.-

(1) Every proclamation for the sale of immovable property shall be made at some place on or near such property by beat of drum or other customary mode, and a copy of the proclamation shall be affixed on a conspicuous part of the property and also upon a conspicuous part of the office of the Tax Recovery Officer.

(2) Where the Tax Recovery Officer so directs, such proclamation shall also be published in the Official Gazette or in a local newspaper, or in both; and the cost of such publication shall be deemed to be costs of the sale.

(3) Where the property is divided into lots for the purpose of being sold separately, it shall not be necessary to make a separate proclamation for each lot, unless proper notice of the sale cannot, in the opinion of the Tax Recovery Officer, otherwise be given.

55. Time of sale.-

No sale of immovable property under this Schedule shall, without the consent in writing of the defaulter, take place until after the expiration of at least thirty days calculated from the date on which a copy of the proclamation of sale has been affixed on the property or in the office of the Tax Recovery Officer, whichever is later.

56. Sale to be by auction.-

The sale shall be by public auction to the highest bidder and shall be subject to confirmation by the Tax Recovery Officer:

¹[Provided that no sale under this rule shall be made if the amount bid by the highest bidder is less than the reserve price, if any, specified under clause (cc) of rule 53.]

57. Deposit by purchaser and resale in default.-

(1) On every sale of immovable property, the person declared to be the purchaser shall pay, immediately after such declaration, a deposit of twenty-five per cent on the amount of his purchase money, to the officer conducting the sale; and, in default of such deposit, the property shall forthwith be resold.

(2) The full amount of purchase money payable shall be paid by the purchaser to the Tax Recovery Officer on or before the fifteenth day from the date of the sale of the property.

58. Procedure in default of payment.-

In default of payment within the period mentioned in the preceding rule, the deposit may, if the Tax Recovery Officer thinks fit, after defraying the expenses of the sale, be forfeited to the Government, and the property shall be resold, and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may subsequently be sold.

²[59. Authority to bid.-

(1) Where the sale of a property, for which a reserve price has been specified under clause (cc) of rule 53, has been postponed for want of a bid of an amount not less than such reserve price, it shall be lawful for an ³[Assessing Officer], if so authorised by the ⁴[ ⁵[Principal Chief Commissioner or Chief Commissioner] or ⁶[Principal Commissioner or Commissioner]] in this behalf, to bid for the property on behalf of the Central Government at any subsequent sale.]

⁷[(2)] All persons bidding at the sale shall be required to declare, if they are bidding on their own behalf or on behalf of their principals. In the latter case, they shall be required to deposit their authority, and in default their bids shall be rejected.

¹[(3) Where the ²[Assessing Officer] referred to in sub-rule (1) is declared to be the purchaser of the property at any subsequent sale, nothing contained in rule 57 shall apply to the case and the amount of the purchase price shall be adjusted towards the amount specified in the certificate.]

60. Application to set aside sale of immovable property on deposit.-

(1) Where immovable property has been sold in execution of a certificate, the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the date of the sale, apply to the Tax Recovery Officer to set aside the sale, on his depositing-

(a) 3*** the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, with interest thereon at the rate of ⁴[one and one-fourth per cent for every month or part of a month], calculated from the date of the proclamation of sale to the date when the deposit is made; and

(b) for payment to the purchaser, as penalty, a sum equal to five per cent of the purchase money, but not less than one rupee.

(2) Where a person makes an application under rule 61 for setting aside the sale of his immovable property, he shall not, unless he withdraws that application, be entitled to make or prosecute an application under this rule.

61. Application to set aside sale of immovable property on ground of non-service of notice or irregularity.-

Where immovable property has been sold in execution of a certificate, ⁵[such Income-tax Officer as may be authorised by the ⁶[Principal Chief Commissioner or Chief Commissioner] or ⁷[Principal Commissioner or Commissioner] in this behalf], the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the date of the sale, apply to the Tax Recovery Officer to set aside the sale of the immovable property on the ground that notice was not served on the defaulter to pay the arrears as required by this Schedule or on the ground of a material irregularity in publishing or conducting the sale:

Provided that-

(a) no sale shall be set aside on any such ground unless the Tax Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of the non-service or irregularity; and

(b) an application made by a defaulter under this rule shall be disallowed unless the applicant deposits the amount recoverable from him in the execution of the certificate.

62. Setting aside sale where defaulter has no saleable interest.-

At any time within thirty days of the sale, the purchaser may apply to the Tax Recovery Officer to set aside the sale on the ground that the defaulter had no saleable interest in the property sold.

63. Confirmation of sale.-

(1) Where no application is made for setting aside the sale under the foregoing rules or where such an application is made and disallowed by the Tax Recovery Officer, the Tax Recovery Officer shall (if the full amount of the purchase money has been paid) make an order confirming the sale, and, thereupon, the sale shall become absolute.

(2) Where such application is made and allowed, and where, in the case of an application made to set aside the sale on deposit of the amount and penalty and charges, the deposit is made within thirty days from the date of the sale, the Tax Recovery Officer shall make an order setting aside the sale:

Provided that no order shall be made unless notice of the application has been given to the persons affected thereby.

64. Return of purchase money in certain cases.-

Where a sale of immovable property is set aside, any money paid or deposited by the purchaser on account of the purchase, together with the penalty, if any, deposited for payment to the purchaser, and such interest as the Tax Recovery Officer may allow, shall be paid to the purchaser.

65. Sale certificate.-

(1) Where a sale of immovable property has become absolute, the Tax Recovery Officer shall grant a certificate specifying the property sold, and the name of the person who at the time of sale is declared to be the purchaser.

(2) Such certificate shall state the date on which the sale became absolute.

66. Postponement of sale to enable defaulter to raise amount due under certificate.-

(1) Where an order for the sale of immovable property has been made, if the defaulter can satisfy the Tax Recovery Officer that there is reason to believe that the amount of the certificate may be raised by the mortgage or lease or private sale of such property, or some part thereof, or of any other immovable property of the defaulter, the Tax Recovery Officer may, on his application, postpone the sale of the property comprised in the order for sale, on such terms, and for such period as he thinks proper, to enable him to raise the amount.

(2) In such case, the Tax Recovery Officer shall grant a certificate to the defaulter, authorising him, within a period to be mentioned therein, and notwithstanding anything contained in this Schedule, to make the proposed mortgage, lease or sale: Provided that all moneys payable under such mortgage, lease or sale shall be paid, not to the defaulter, but to the Tax Recovery Officer:

Provided also that no mortgage, lease or sale under this rule shall become absolute until it has been confirmed by the Tax Recovery Officer.

67. Fresh proclamation before re-sale.-

Every re-sale of immovable property, in default of payment of the purchase money within the period allowed for such payment, shall be made after the issue of a fresh proclamation in the manner and for the period hereinbefore provided for the sale.

68. Bid of co-sharer to have preference.-

Where the property sold is a share of undivided immovable property, and two or more persons, of whom one is a co-sharer, respectively bid the same sum for such property or for any lot, the bid shall be deemed to be the bid of the co-sharer.

¹[68A. Acceptance of property in satisfaction of amount due from the defaulter.-

(1) Without prejudice to the provisions contained in this Part, an ²[Assessing Officer], duly authorised by the ³[⁴[Principal Chief Commissioner or Chief Commissioner] or ⁵[Principal Commissioner or Commissioner]] in this behalf, may accept in satisfaction of the whole or any part of the amount due from he defaulter the property, the sale of which has been postponed for the reason mentioned in sub-rule (1) of rule 59, at such price as may be agreed upon between the ²[Assessing Officer] and the defaulter.

(2) Where any property is accepted under sub-rule (1), the defaulter shall deliver possession of such property to the ¹[Assessing Officer] and on the date the possession of the property is delivered to the ¹[Assessing Officer], the property shall vest in the Central Government and the Central Government shall, where necessary, intimate the concerned Registering Officer appointed under the Registration Act, 1908 (16 of 1908), accordingly.

(3) Where the price of the property agreed upon under sub-rule (1) exceeds the amount due from the defaulter, such excess shall be paid by the ¹[Assessing Officer] to the defaulter within a period of three months from the date of delivery of possession of the property and where the ¹[Assessing Officer] fails to pay such excess within the period aforesaid, the Central Government shall, for the period commencing on the expiry of such period and ending with the date of payment of the amount remaining unpaid, pay simple interest at ²[one-half per cent. for every month or part of a month] to the defaulter on such amount.]

³[68B. Time limit for sale of attached immovable property.-

(1) No sale of immovable property shall be made under this Part after the expiry of three years from the end of the financial year in which the order giving rise to a demand of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has become conclusive under the provisions of section 245-I or, as the case may be, final in terms of the provisions of Chapter XX:

Provided that where the immovable property is required to be re-sold due to the amount of highest bid being less than the reserve price or under the circumstances mentioned in rule 57 or rule 58 or where the sale is set aside under rule 61, the aforesaid period of limitation for the sale of the immovable property shall stand extended by one year.

(2) In computing the period of limitation under sub-rule (1), the period-

(i) during which the levy of the aforesaid tax, interest, fine, penalty or any other sum is stayed by an order or injunction of any court; or

(ii) during which the proceedings of attachment or sale of the immovable property are stayed by an order or injunction of any court; or

(iii) commencing from the date of the presentation of any appeal against the order passed by the Tax Recovery Officer under this Schedule and ending on the day the appeal is decided, shall be excluded:

Provided that where immediately after the exclusion of the aforesaid period, the period of limitation for the sale of the immovable property is less than 180 days, such remaining period shall be extended to 180 days and the aforesaid period of limitation shall be deemed to be extended accordingly.

(3) Where any immovable property has been attached under this Part before the 1st day of June, 1992, and the order giving rise to a demand of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has also become conclusive or final before the said date, that date shall be deemed to be the date on which the said order has become conclusive or, as the case may be, final.

(4) Where the sale of immovable property is not made in accordance with the provisions of sub-rule (1), the attachment order in relation to the said property shall be deemed to have been vacated on the expiry of the time of limitation specified under this rule.]

1. The word "and" omitted by Act 41 of 1975, s. 81 (w.e.f. 1-10-1975).

2. Ins. by s. 81, ibid, (w.e.f. 1-10-1975).

1. The proviso added by Act 41 of 1975, s. 81 (w.e.f. 1-10-1975).

2. Ins. by s. 81 ibid. (w.e.f. 1-10-1975).

3. Subs. by Act 3 of 1989, s. 54, for "Income-tax Officer" (w.e.f. 1-4-1988).

4. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

5. Subs. by Act 25 of 2014, s. 4 for "Chief Commissioner" (w.e.f. 1-6-2013).

6. Subs. by s. 4, ibid., for "Commissioner" (w.e.f. 1-6-2013).

7. The rule 59 re-numbered as sub-rule (2) thereof by Act 41 of 1975, s. 81 (w.e.f. 1-10-1975).

1. Ins. by Act 4 of 1988, s. 124 (w.e.f. 1-4-1989).

2. Subs. by Act 3 of 1989, s. 54, for "Income-tax Officer" (w.e.f. 1-4-1988).

3. The words "for payment to the Assessing Officer" omitted by Act 3 of 1989, s. 54 (w.e.f. 1-4-1989).

4. Subs. by Act 22 of 2007, s. 81, for "fifteen per cent. per annum" (w.e.f. 1-4-2008). Earlier it was substituted by Act 67 of 1984, s. 24 for "twelve per cent" (w.e.f. 1-10-1984). Earlier it was subs. by Act 16 of 1972, s. 25, for "nine per cent" (w.e.f. 1-4-1972). and it was subs. by Act 42 of 1970, s. 56, for "the rate of six per cent. per annum" (w.e.f. 1-4-1971).

5. Subs. by Act 3 of 1989, s. 54, for "Assessing Officer" (w.e.f. 1-4-1989).

6. Subs. by Act 25 of 2014, s. 4 for "Chief Commissioner" (w.e.f. 1-6-2013).

7. Subs. by s. 4, ibid., for "Commissioner" (w.e.f. 1-6-2013).

1. Ins. by Act 41 of 1975, s. 81 (w.e.f. 1-10-1975).

2. Subs. by Act 3 of 1989, s. 54, for "Income-tax Officer" (w.e.f. 1-4-1988).

3. Subs. by Act 4 of 1988, s. 2, for "Commissioner" (w.e.f. 1-4-1988).

4. Subs. by Act 25 of 2014, s. 4 for "Chief Commissioner" (w.e.f. 1-6-2013).

5. Subs. by s. 4, ibid., for "Commissioner" (w.e.f. 1-6-2013).

1. Subs. by Act 3 of 1989, s. 54, for "Income-tax Officer" (w.e.f. 1-4-1988).

2. Subs. by Act 22 of 2007, s. 81, for "six per cent. per annum" (w.e.f. 1-4-2008). Earlier it was substituted by Act 54 of 2003, s. 21, for "eight per cent" (w.e.f. 8-9-2003). Earlier it was substituted by Act 20 of 2002, s. 109 (w.e.f. 1-6-2002). and it was substituted by Act 14 of 2001, s. 95, (w.e.f. 1-6-2001).

3. Ins. by Act 18 of 1992, s. 87 (w.e.f. 1-6-1992).

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