Section 162(1)

Section 162(1) — the law in short

What the courts have decided on section 162(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Statutory position — s.162: the representative assessee's right to recover and to retain, and the Assessing Officer's certificate that caps his exposure CBDT Circulars & InstructionsCuts both ways
  I am about to be treated as the agent of a non-resident and I still hold money payable to him. Can I hold that money back against the tax, and how do I stop the Department later saying I should have retained more?
  Yes, and section 162(2) is available to you before any order is made against you — it applies to 'any representative assessee, or any person who apprehends that he may be assessed as a representative assessee'. Such a person may retain, out of any money payable by him to the principal, a sum equal to his estimated liability under Chapter XV; and if the principal disputes the amount, he may secure from the Assessing Officer a certificate stating the amount to be so retained pending final settlement, and that certificate 'shall be his warrant for retaining that amount'. Section 162(1) gives the separate right, after payment, to recover what he has paid from the person on whose behalf it was paid, or to retain an equal amount out of moneys in his possession or coming to him in his representative capacity. Section 162(3) is the protection people miss: the amount recoverable from him at final settlement shall not exceed the amount specified in the certificate, except to the extent that he then has in his hands additional assets of the principal.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.