Section 167

Section 167 — the law in short

What the courts have decided on section 167, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Statutory position — the equalisation levy is charged by Chapter VIII of the Finance Act, 2016 and not by the Income-tax Act: what the Chapter contains, when it commenced, and the two different dates on which the two levies stopped CBDT Circulars & InstructionsCuts both ways
  A notice has come in demanding equalisation levy, and I cannot find the levy anywhere in the Income-tax Act. Which statute is it actually in, what machinery governs assessment and appeal, and has it not been abolished?
  The equalisation levy is not in the Income-tax Act, 1961 at all. It is charged by Chapter VIII of the Finance Act, 2016 (Act 28 of 2016), which is a self-contained code running from section 163 to section 180 with its own extent and commencement provision, its own definitions, two charging sections, its own collection, statement, assessment, rectification, interest, penalty and appeal provisions, its own rule-making power and its own removal-of-difficulties power. Chapter VIII came into force on 1 June 2016, that date having been appointed by Notification No. S.O. 1904(E) dated 27 May 2016 issued under sub-section (2) of section 163, and the Equalisation levy Rules, 2016 were notified the same day by S.O. 1905(E) under sub-section (3) of section 179. Both levies have since been switched off, on DIFFERENT dates: the two per cent levy on e-commerce supply or services does not apply to consideration received or receivable by an e-commerce operator on or after 1 August 2024 (section 165A(4)), and the six per cent levy on specified services does not apply to consideration for specified service received or receivable on or after 1 April 2025 (section 165(3)).
• Statutory position — s.166 and s.167: the Department may assess the beneficiary direct, and s.167 is about remedies against property, NOT a bar on double taxation CBDT Circulars & InstructionsCuts both ways
  The Department has assessed our trustee under section 161 and has now issued a notice to me as beneficiary on the same income. Which section stops it doing both, and is it section 167?
  It is not section 167. Section 166 is the enabling provision: 'Nothing in the foregoing sections in this Chapter shall prevent either the direct assessment of the person on whose behalf or for whose benefit income therein referred to is receivable, or the recovery from such person of the tax payable in respect of such income.' Section 167 is headed 'Remedies against property in cases of representative assessees' and does something quite different: it gives the Assessing Officer the same remedies against all property of any kind vested in or under the control or management of a representative assessee as he would have against the property of any person liable to pay tax, and in as full and ample a manner, 'whether the demand is raised against the representative assessee or against the beneficiary direct'. It is a recovery-reach provision in the Revenue's favour, not a taxpayer protection. The bar on taxing the same income twice comes from elsewhere: from section 161(2), from the Central Board of Direct Taxes' own instruction of 24 February 1967, and from the case law on the exercise of the option.

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.