Why This Matters
Many taxpayers recently received Recovery Notices citing Sections 222, 229, and 232 of the Income-tax Act.
These notices can be alarming because they mention strong recovery powers such as bank account attachment or property seizure.
This guide explains why these notices come and what your rights are before any recovery action begins.
1. Your Most Important Legal Protection
Recovery Cannot Start Unless a Proper Notice Is Issued
Before any coercive action, the law requires mandatory steps:
Section 156 – Mandatory Notice of Demand
A valid demand notice must specify:
- Amount payable
- Reasons for demand
- Relevant section of the law
- Time allowed for payment
Section 220(1) – 30 Days to Pay
You must be given 30 days to comply, unless reduced with written reasons.
Section 220(6) – Stay When Appeal Is Filed
If you file an appeal:
- Recovery can be stayed
- A stay of demand must be requested under Section 220(6)
Section 222 – Recovery Certificate Only After Non-Compliance
A Recovery Certificate can be issued only if:
1. A valid Section 156 notice was served
2. The time period for payment has expired
3. You did not pay or respond
Courts consistently hold:
Recovery without prior demand notice is illegal.
2. Why These Notices Are Issued
Usually due to common errors such as:
Old or legacy demands showing on the portal
- TDS mismatches
- Wrong challan details
Appeal effects pending
Rectification not processed
- Mistakes in 143(1) intimation
Many demands appearing online are not actually payable.
3. What These Sections Mean
Section 222 – Recovery by Tax Recovery Officer (TRO)
Allows actions such as:
Bank account attachment
Property seizure
Salary or business income garnishing
But only after proper notice procedure is complete.
Section 229 – Penalties & Interest Recoverable as Tax
Any interest or penalty becomes part of taxable arrears
and can be recovered like tax.
Section 232 – Recovery Through State Authorities
Allows government departments and public bodies to withhold payments due to the taxpayer.
4. What Happens If You Ignore the Notice
Possible actions:
Bank account freezing
Salary garnishing
Attachment or sale of property
Additional penalties & interest
All of these are avoidable with a timely response.
5. How to Avoid Paying an Incorrect Demand
. Check “Outstanding Demand” on the income-tax portal
. Match with 26AS, AIS, challans, and return copies
. Respond to the notice with proof
. File Rectification (Section 154) if it’s a processing error
. File Appeal + Stay (Section 220(6)) if the demand is disputed
Key Takeaway
A recovery notice does not mean immediate attachment.
Recovery can begin only after a valid Section 156 notice and the statutory 30-day period.
Use this opportunity to correct mistakes, file rectification, or dispute incorrect demands.