Section 422 — Recovery of tax arrear in respect of non-resident from his assets. Successor to s.173 of the 1961 Act.
Section 422 is in Chapter XIX — Collection and Recovery of Tax, which runs from section 390 to section 430.
The section deals with recovery where the person entitled to income referred to in section 9(2) is a non-resident. Irrespective of section 304(1) or (5), the tax chargeable on that income — whether assessed in the non-resident's own name or in the name of his agent liable as a representative assessee — may be recovered by deduction under Chapter XIX-B, and any arrears of tax may in addition be recovered under the provisions of the Act from any assets of the non-resident which are, or may at any time come, within India.
Recovery from a non-resident is difficult once the assessment is made, so the section keeps both routes open at once — collection at source and enforcement against Indian assets — and overrides section 304(1) and (5) so that the assessment being made on or through an agent does not confine recovery to that agent.
For a non-resident with section 9(2) income, tax can be taken by deduction under Chapter XIX-B whether the assessment stands in his name or his agent's, and arrears can be enforced against any of his assets in India. The reach extends to assets that are not in India yet — the section covers assets which "may at any time come" within India, so property brought in later is not beyond recovery. Nothing in section 304(1) or (5) limits this.
Tax on income of a non-resident referred to in section 9(2) is assessed in the name of his Indian agent, who is liable as a representative assessee, and part of the demand is still outstanding after recovery from the agent. The non-resident cannot treat the matter as closed because the assessment ran through the agent: the section operates irrespective of section 304(1) and (5), so the tax may be recovered by deduction under Chapter XIX-B and, in addition, the arrears may be recovered from any assets of the non-resident within India. The reach is forward-looking too — clause (b) extends to assets which 'may at any time come' within India, so funds remitted or equipment shipped in a later year are equally available.
In recovery proceedings against a non-resident — a deduction under Chapter XIX-B, or recovery action taken against his Indian assets — and in the assessment itself, made either on the non-resident or on his agent as representative assessee.
any arrears of tax may also be recovered as per the provisions of this Act from any assets of the non-resident which are, or may at any time come, within India
See the full 1961 to 2025 concordance.
