Law: Income Tax Act, 1961

Section: 2(43)

Income-tax----Revenue recovery---Special Court for recovery of moneys diverted from Banks and financial institutions by irregular securities transactions---Taxes due from "notified" persons to be discharged in priority---Do not include interest and penalty---Special Court can scale down extent of tax liability to be paid out of attached assets in certain circumstances---Taxing Authorities may proceed aliunde for balance---Tax liability relating to transactions during statutory period alone covered---Recovery permissible only of sums legally assessed as on date of distribution---" Tax" due", meaning of --¬Right of third party in property attached not extinguished subject to custodians power under S. 4---Indian Income Tax Act, 1961, S.2(43)--¬Indian Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, Ss.3, 4 & 11. With a view to ensuring speedy recovery of huge sums of money diverted by brokers from banks and financial institutions by irregular transactions in Government and other securities during the period April 1, 1991 to June 6, 1992, the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 was enacted The Act provided for the establishment of a Special Court to try offences relating to transactions in securities and disposal of properties of offenders, attached under the Act. Section 11(2) of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 lays down the priorities for distribution, and the liabilities specified under clause (a), i.e., revenues, taxes, cesses and rates due from the persons notified, are to be discharged in priority to other liabilities. This tax liability is the tax liability of the notified person arising out of transactions in securities during the "statutory period" of April 1, 1991, to June 6;, 1992. Every kind of tax liability of the notified person for any other period is not covered by section 11(2)(a), although the liability may continue to be the liability of the notified person. But the priority, however, which is given under section 11(2)(a) to such tax liability only covers such liability for the period April 1, 1991 to June…

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