The certificate has already gone to the Tax Recovery Officer. The Commissioner (Appeals) has cut the addition but the Department has gone to the Tribunal. Do I have to pay the whole certificate amount, and who do I ask?
You ask the Tax Recovery Officer, and on the reduced part he has no discretion. Section 225 has three sub-sections. Sub-section (1) makes it lawful for the Tax Recovery Officer to grant time for the payment of any tax, and provides that when he does so he shall stay the proceedings for the recovery of such tax until the expiry of the time so granted. Sub-section (2) deals with your situation: where the order giving rise to a demand for which a certificate has been drawn up is modified in appeal or other proceeding under the Act and, as a consequence, the demand is reduced, but the order is the subject-matter of further proceeding under the Act, the Tax Recovery Officer shall 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. Sub-section (3) requires him, once the order which was the subject-matter of the appeal or other proceeding has become final and conclusive, to amend the certificate or cancel it, as the case may be. Each of the second and third is expressed with 'shall'.
Decided by the CBDT Circulars & Instructions (Not applicable — statutory text), reported as Section 225 of the Income-tax Act, 1961. It bears on section 225, section 220(6), section 222, section 226, section Second Schedule of the Income Tax Act 1961, in Demand, Recovery & Stay and Appeals matters.
Everyone knows section 220(6). Almost nobody uses section 225, and the two operate at different moments and before different officers. Section 220(6) is the Assessing Officer's discretion to treat an assessee as not in default while an appeal is pending. Section 225 belongs to the stage after the certificate has been drawn up and sent to the Tax Recovery Officer, when the Assessing Officer has largely dropped out of the picture and the assessee is being told that the file is no longer with him. At that point section 225 is the provision that says what the Tax Recovery Officer himself may and must do. The sub-section that is most under-used is the second, and it is under-used because it is read as if it were discretionary. It is not. Where an appellate order has reduced the demand but the order is still the subject-matter of further proceeding — typically the Department's appeal to the Tribunal — the Tax Recovery Officer 'shall stay' recovery of the part of the certificate amount pertaining to the reduction, for as long as that proceeding is pending. An assessee who has won at the first appeal and is being pressed for the full certificate amount is being pressed for money the statute says must be left alone. The application has to identify the reduced part arithmetically, because the stay is expressed as attaching to a part, not to the whole. The third sub-section matters at the other end. When the litigation is finally over, the certificate does not lapse of its own accord; the Tax Recovery Officer is to amend or cancel it. A certificate that nobody amended can keep an attachment alive against property years after the demand behind it has gone, which surfaces when the property is sold and the buyer's search throws up the encumbrance. Asking for the amendment in writing, and keeping the reply, is worth more later than it costs now. One limit should be kept in view. Section 225 says nothing about attachment, sale, arrest or detention. Those are in the Second Schedule, and a grievance about how a recovery was conducted does not arise under this section at all.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Section 225, under the heading 'Stay of proceedings in pursuance of certificate and amendment or cancellation thereof', reads in full: '(1) It shall be lawful for the Tax Recovery Officer to grant time for the payment of any tax and when he does so, he shall stay the proceedings for the recovery of such tax until the expiry of the time so granted. (2) Where the order giving rise to a demand of tax for which a certificate has been drawn up is modified in appeal or other proceeding under this Act, and, as a consequence thereof, the demand is reduced but the order is the subject-matter of further proceeding under this Act, the Tax Recovery Officer shall 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. (3) Where a certificate has been drawn up and subsequently the amount of the outstanding demand is reduced as a result of an appeal or other proceeding under this Act, the Tax Recovery Officer shall, when the order which was the subject-matter of such appeal or other proceeding has become final and conclusive, amend the certificate, or cancel it, as the case may be.' The section as printed has three sub-sections, no sub-section (4), no sub-section (5) and no proviso, and the edition used carries no amendment footnote against its words.
Section 225 confers on the Tax Recovery Officer a power and imposes on him two duties, all of them operating after a certificate has been drawn up. The power, in sub-section (1), is to grant time for the payment of any tax, and once granted, recovery proceedings stand stayed until that time expires. The first duty, in sub-section (2), arises where an appeal or other proceeding under the Act has reduced the demand but the order remains the subject-matter of further proceeding: the Tax Recovery Officer shall stay recovery of so much of the amount specified in the certificate as pertains to the reduction, and shall do so for as long as that appeal or other proceeding is pending. The second duty, in sub-section (3), arises once the order has become final and conclusive: the certificate is then to be amended or cancelled according to what has become of the demand. The section says nothing about the modes of recovery themselves.
Not applicable — this is a statement of statutory text taken from the published edition of the section. No judicial reasoning is involved, and the case law on stay of recovery is carried separately in this library.
Where the order giving rise to a demand of tax for which a certificate has been drawn up is modified in appeal or other proceeding under this Act, and, as a consequence thereof, the demand is reduced but the order is the subject-matter of further proceeding under this Act, the Tax Recovery Officer shall 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.
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Handle my notice → Ask a CA on WhatsAppYou ask the Tax Recovery Officer, and on the reduced part he has no discretion. Section 225 has three sub-sections. Sub-section (1) makes it lawful for the Tax Recovery Officer to grant time for the payment of any tax, and provides that when he does so he shall stay the proceedings for the recovery of such tax until the expiry of the time so granted. Sub-section (2) deals with your situation: where the order giving rise to a demand for which a certificate has been drawn up is modified in appeal or other proceeding under the Act and, as a consequence, the demand is reduced, but the order is the subject-matter of further proceeding under the Act, the Tax Recovery Officer shall 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. Sub-section (3) requires him, once the order which was the subject-matter of the appeal or other proceeding has become final and conclusive, to amend the certificate or cancel it, as the case may be. Each of the second and third is expressed with 'shall'. This was decided by the CBDT Circulars & Instructions (Not applicable — statutory text) and bears on section 225, section 220(6), section 222, section 226, section Second Schedule of the Income Tax Act 1961. It is reported as Section 225 of the Income-tax Act, 1961. Everyone knows section 220(6). Almost nobody uses section 225, and the two operate at different moments and before different officers. Section 220(6) is the Assessing Officer's discretion to treat an assessee as not in default while an appeal is pending. Section 225 belongs to the stage after the certificate has been drawn up and sent to the Tax Recovery Officer, when the Assessing Officer has largely dropped out of the picture and the assessee is being told that the file is no longer with him. At that point section 225 is the provision that says what the Tax Recovery Officer himself may and must do. The sub-section that is most under-used is the second, and it is under-used because it is read as if it were discretionary. It is not. Where an appellate order has reduced the demand but the order is still the subject-matter of further proceeding — typically the Department's appeal to the Tribunal — the Tax Recovery Officer 'shall stay' recovery of the part of the certificate amount pertaining to the reduction, for as long as that proceeding is pending. An assessee who has won at the first appeal and is being pressed for the full certificate amount is being pressed for money the statute says must be left alone. The application has to identify the reduced part arithmetically, because the stay is expressed as attaching to a part, not to the whole. The third sub-section matters at the other end. When the litigation is finally over, the certificate does not lapse of its own accord; the Tax Recovery Officer is to amend or cancel it. A certificate that nobody amended can keep an attachment alive against property years after the demand behind it has gone, which surfaces when the property is sold and the buyer's search throws up the encumbrance. Asking for the amendment in writing, and keeping the reply, is worth more later than it costs now. One limit should be kept in view. Section 225 says nothing about attachment, sale, arrest or detention. Those are in the Second Schedule, and a grievance about how a recovery was conducted does not arise under this section at all. If it applies to you, the first step is this: Work out first which officer you are dealing with. Before a certificate is drawn up, a stay application goes to the Assessing Officer under section 220(6) and the library already carries the instructions and the case law on that. Once a certificate is drawn up under section 222, section 225 is the provision that governs what the Tax Recovery Officer may and must do.
Section 225, under the heading 'Stay of proceedings in pursuance of certificate and amendment or cancellation thereof', reads in full: '(1) It shall be lawful for the Tax Recovery Officer to grant time for the payment of any tax and when he does so, he shall stay the proceedings for the recovery of such tax until the expiry of the time so granted. (2) Where the order giving rise to a demand of tax for which a certificate has been drawn up is modified in appeal or other proceeding under this Act, and, as a consequence thereof, the demand is reduced but the order is the subject-matter of further proceeding under this Act, the Tax Recovery Officer shall 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. (3) Where a certificate has been drawn up and subsequently the amount of the outstanding demand is reduced as a result of an appeal or other proceeding under this Act, the Tax Recovery Officer shall, when the order which was the subject-matter of such appeal or other proceeding has become final and conclusive, amend the certificate, or cancel it, as the case may be.' The section as printed has three sub-sections, no sub-section (4), no sub-section (5) and no proviso, and the edition used carries no amendment footnote against its words. It was decided by the CBDT Circulars & Instructions (Not applicable — statutory text). On those facts the CBDT Circulars & Instructions held as follows. Section 225 confers on the Tax Recovery Officer a power and imposes on him two duties, all of them operating after a certificate has been drawn up. The power, in sub-section (1), is to grant time for the payment of any tax, and once granted, recovery proceedings stand stayed until that time expires. The first duty, in sub-section (2), arises where an appeal or other proceeding under the Act has reduced the demand but the order remains the subject-matter of further proceeding: the Tax Recovery Officer shall stay recovery of so much of the amount specified in the certificate as pertains to the reduction, and shall do so for as long as that appeal or other proceeding is pending. The second duty, in sub-section (3), arises once the order has become final and conclusive: the certificate is then to be amended or cancelled according to what has become of the demand. The section says nothing about the modes of recovery themselves.
Not applicable — this is a statement of statutory text taken from the published edition of the section. No judicial reasoning is involved, and the case law on stay of recovery is carried separately in this library. In the words reproduced by the source cited on this page: "Where the order giving rise to a demand of tax for which a certificate has been drawn up is modified in appeal or other proceeding under this Act, and, as a consequence thereof, the demand is reduced but the order is the subject-matter of further proceeding under this Act, the Tax Recovery Officer shall 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."
It was decided by the CBDT Circulars & Instructions and is reported as Section 225 of the Income-tax Act, 1961. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 225, section 220(6), section 222, section 226, section Second Schedule, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. Section 225 confers on the Tax Recovery Officer a power and imposes on him two duties, all of them operating after a certificate has been drawn up. The power, in sub-section (1), is to grant time for the payment of any tax, and once granted, recovery proceedings stand stayed until that time expires. The first duty, in sub-section (2), arises where an appeal or other proceeding under the Act has reduced the demand but the order remains the subject-matter of further proceeding: the Tax Recovery Officer shall stay recovery of so much of the amount specified in the certificate as pertains to the reduction, and shall do so for as long as that appeal or other proceeding is pending. The second duty, in sub-section (3), arises once the order has become final and conclusive: the certificate is then to be amended or cancelled according to what has become of the demand. The section says nothing about the modes of recovery themselves. It arises in Demand, Recovery & Stay and Appeals matters, on section 225, section 220(6), section 222, section 226, section Second Schedule of the Income Tax Act 1961, and was decided by Not applicable — statutory text. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Ask under sub-section (2) in writing, and quantify the reduction. The stay under that sub-section attaches to 'such part of the amount specified in the certificate as pertains to the said reduction' — so the application must identify the reduced part in rupees, not merely assert that an appeal succeeded. Show that the order is still the subject-matter of further proceeding under the Act. Sub-section (2) applies where the demand is reduced but the order remains under challenge; attach the Department's appeal memo or the reference, because that is the condition the stay hangs on. Hold the Tax Recovery Officer to the word 'shall'. Sub-section (2) does not say he may stay; it says he shall stay the recovery of that part for the period for which the appeal or other proceeding remains pending. Where the litigation is over, press sub-section (3) rather than negotiating. Once the order has become final and conclusive, the Tax Recovery Officer is to amend the certificate or cancel it, as the case may be; a certificate left standing for a demand that has gone is a live attachment on a dead liability. Use sub-section (1) for time. It permits the Tax Recovery Officer to grant time for the payment of any tax, and once he does, recovery proceedings are stayed until the expiry of the time granted. This is the Tax Recovery Officer's own power and does not depend on the Assessing Officer. Do not read section 225 as covering everything the Tax Recovery Officer does. The section says nothing about attachment, sale, arrest or detention; those are in the Second Schedule and the rules made under it, and nothing about them is stated here. Where a fresh demand notice is issued after an appellate order, check whether the original certificate can survive at all — the library carries the Supreme Court authority on a fresh demand after appeal, which is where that question belongs.
Still good law. The section stands as printed, and the edition used carries no amendment footnote against any of its three sub-sections. A second edition of the same section was located and is recorded as a corroborating source. The successor provision under the Income-tax Act, 2025 is not given here. None has been read in its own terms, and a mapping that has not been read on the provision's own text is worse than a gap, so none is named; a practitioner working on a tax year beginning on or after 1 April 2026 should identify and read that section for himself. For tax years beginning before 1 April 2026 the 1961 Act continues to govern proceedings pending and proceedings initiated afterwards, under section 536(2)(c) of the 2025 Act, so section 225 remains live law rather than history for a large body of recovery work now in progress. What is deliberately not stated here is the case law. There is a substantial body of authority on stay of recovery, almost all of it about section 220(6) and the Board's instructions, and about the twenty per cent figure; this library carries it separately and it is not restated or summarised in this entry. Nothing here should be read as a statement of how a Tax Recovery Officer has been required by any court to exercise the power in sub-section (1), or of what 'final and conclusive' has been held to mean in sub-section (3). No decision construing section 225 itself has been found, and the section's commencement date has not been established, so no date is given on this entry. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The section was transcribed from a published edition headed 'Income-tax Act, 1961', under the heading 'Stay of proceedings in pursuance of certificate and amendment or cancellation thereof'. That edition prints three sub-sections and no more: there is no sub-section (4), no sub-section (5) and no proviso, and there is no footnote against the operative words. A second edition of the same section is recorded as a corroborating source. WHAT WAS NOT DONE, AND WHY IT MATTERS HERE. Section 222 has not been read for this entry. What this entry says about a certificate being 'drawn up' is taken from the words of section 225 itself, which speak throughout of a certificate already drawn up; the conditions on which a certificate may be drawn up, the forms it takes and the officer who draws it are in section 222 and are not stated here. The Second Schedule has not been read either. It is named once, to mark the boundary of what this section covers, and nothing about attachment, sale, arrest or detention is asserted anywhere in this entry. Section 226, which provides other modes of recovery including the garnishee power, is named for the same reason and is not described. THE CASE LAW IS DELIBERATELY ABSENT from the body of this entry. This library already carries a large set of decisions on stay of recovery — on section 220(6), on the Board's instructions, on the twenty per cent figure, on garnishee notices issued the same day as a stay rejection, and on what happens to a demand when an appellate order supersedes the assessment. Restating any of it here would duplicate those entries and risk stating them loosely. A reader who needs the authorities should go to them rather than to this page, which is a statement of what the section says and nothing else. No decision construing section 225 has been found, the section's commencement date has not been established, and no date is given. NO SUCCESSOR PROVISION under the Income-tax Act, 2025 is carried on this entry: none has been read in its own terms, so none is named. Read against section 536(2)(c) of the 2025 Act, which continues the 1961 Act for tax years beginning before 1 April 2026, section 225 remains the operative provision for a very large number of certificates now outstanding, and a Tax Recovery Officer acting on one of them is acting under it. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Section 225 confers on the Tax Recovery Officer a power and imposes on him two duties, all of them operating after a certificate has been drawn up. The power, in sub-section (1), is to grant time for the payment of any tax, and once granted, recovery proceedings stand stayed until that time expires. The first duty, in sub-section (2), arises where an appeal or other proceeding under the Act has reduced the demand but the order remains the subject-matter of further proceeding: the Tax Recovery Officer shall stay recovery of so much of the amount specified in the certificate as pertains to the reduction, and shall do so for as long as that appeal or other proceeding is pending. The second duty, in sub-section (3), arises once the order has become final and conclusive: the certificate is then to be amended or cancelled according to what has become of the demand. The section says nothing about the modes of recovery themselves.
TaxSphere, “Statutory position — s.225: once the certificate is drawn up the Tax Recovery Officer has his own power to grant time and stay, a duty to stay the reduced part, and a duty to amend or cancel”, https://taxnotice.vittsphere.com/caselaw/case/statutory-position-225-what-the-tax-recovery-officer-may-do-once-the-certificate-is-drawn-up/ (validity last checked 2026-09-23)
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