“Tax Recovery Officer”

Interest on doubtful debts credited to a suspense account by banking companies is taxable, unless the Income Tax Officer is satisfied that recovery is practically improbable. Subsequent circulars clarified that such interest is taxable only upon actual recovery, particularly if there has been no recovery for three consecutive years.

A tax cannot be collected or recovered if the law does not provide a machinery for its collection and recovery. If a statutory provision has multiple interpretations, the court must choose the one that reflects the legislature's true intention.

Additions to income cannot be made solely on the basis of loose papers or notings found during a search in the premises of a third party, especially when there is no corroborative evidence to suggest that the assessee actually received the amounts or made payments.

The Supreme Court has held that the Tax Recovery Officer has the power to issue a prohibitory order under Section 222 of the Income Tax Act, 1961, even before the demand becomes final. This power is available when there is a certificate of arrears.

Section 51 of the SEZ Act, 2005, and its definitions of 'service' override the term 'service' as it accrues in Section 10AA of the Income Tax Act, 1961, especially when read in conjunction with relevant government instructions.

The Income Tax Officer (ITO) bears the onus to verify tax payment by recipients when the assessee provides declarations confirming income has been offered for tax.