Section 499 — Certain transfers to be void
Old Act equivalent: Section 281 of IT Act 1961 Sub-part: Chapter XXIII—Miscellaneous
Statutory Text
- (1) Where, during the pendency of any proceeding under this Act or after the completion thereof, but before the service of notice by the Tax Recovery Officer as per the procedure specified under section 413, any assessee creates a charge on, or parts with the possession of, any of his assets in favour of any other person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of the completion of the said proceeding or otherwise. (2) The charge or transfer as referred to in sub-section (1) shall not be void if it is made—
(a) for adequate consideration and without notice of the pendency of such proceeding or, as the case may be, without notice of such tax or other sum payable by the assessee; or
(b) with the previous permission of the Assessing Officer.
(3) This section applies to cases where the amount of tax or other sum payable or
likely to be payable exceeds 5000 and the assets charged or transferred exceed 10000 in value.
(4) For the purposes of this section,––
(a) “assets” means land, building, machinery, plant, shares, securities, fixed deposits in banks, and virtual digital asset, to the extent to which any of the said assets do not form part of the stock-in-trade of the business of the assessee;
(b) the modes of creating a charge on or parting with the possession of such assets shall include sale, mortgage, gift, exchange or any other mode of transfer. Provisional attachment to protect revenue in certain cases.
Provisos
None.
Explanations
None.
Tables
None.
Key Structure
- Applies to: Assessees who transfer assets during pendency of proceedings or before TRO notice.
- Conditions: Transfer during pendency of proceedings or after completion but before TRO notice; transfer to defraud revenue.
- Time limits: During pendency or after assessment but before recovery notice.
- Monetary limits: None.
- Exceptions: Transfer for adequate consideration and without notice of pending proceedings; transfer with prior AO permission.
Cross-References
- Section 413
Amendment Notes
None noted from the extracted pages.