What the courts have decided on section 226, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Kundlas Loh Udyog v Union of India
High CourtHelps taxpayerValidity unconfirmed
The officer has attached my cash credit account under 226(3). Can an unutilised overdraft limit be garnished?
No. Section 226(3) is garnishee machinery: it reaches money due to the assessee or held for him, which presupposes a debtor-creditor relationship. A bank that has merely sanctioned a cash credit or overdraft limit owes the customer nothing until it is drawn — if anything, drawing makes the customer the debtor.
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Flipkart India Private Limited v ACIT
High CourtHelps taxpayerValidity unconfirmed
Did the 2016 Office Memorandum wipe out Instruction No. 1914 and its hardship tests?
No. The 2016 memorandum only partially modifies Instruction No. 1914; both must be read together. The tests of an unreasonably high-pitched assessment and of genuine hardship survive, and a mechanical demand for a percentage without reasons will not stand.
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KEC International Ltd v B.R. Balakrishnan
High CourtHelps taxpayer
What is the officer actually required to do when deciding your stay application?
Four things: set out your case briefly, give short prima facie reasons if directing a part deposit, indicate whether you are financially sound, and check whether the time to appeal has expired. Coercive measures should generally not be used during the appeal period.
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Statutory position — s.115P interest at one per cent a month and s.115Q deeming the company an assessee in default on unpaid DDT
CBDT Circulars & InstructionsCuts both waysSuperseded by amendment
My company paid its dividend distribution tax late. What interest runs, from when, and what can the Department do to recover the tax itself?
Section 115P charges simple interest at one per cent for every month or part of a month on the unpaid tax on distributed profits, running from the date immediately after the last date on which the tax was payable under s.115-O(3) — fourteen days from the earliest of declaration, distribution or payment — and ending on the date the tax is actually paid. Section 115Q then deems the principal officer and the company to be an assessee in default in respect of the amount payable, and applies all the provisions of the Act for the collection and recovery of income-tax.
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.