Income-tax Act, 1961 | Chapter XIX-A

Section 245J: Recovery of Sums Due Under an Order of Settlement

Section 245J addresses the recovery of amounts specified in an income-tax settlement order, including the consequences of a payment default and the authority responsible for recovery.

Important legal context: The Income-tax Settlement Commission ceased to operate from 1 February 2021. Interim Boards for Settlement were established for qualifying pending applications. Section 245J remains relevant when examining the enforcement of settlement orders under the Income-tax Act, 1961; the applicable law and transitional provisions must be checked for the relevant period.

Text of Section 245J

Any sum specified in an order of settlement passed under sub-section (4) of section 245D may, subject to such conditions, if any, as may be specified therein, be recovered, and any penalty for default in making payment of such sum may be imposed and recovered in accordance with the provisions of Chapter XVII, by the Assessing Officer having jurisdiction over the person who made the application for settlement under section 245C.

Source: Income Tax Department - Section 245J. The original legislative footnote records the substitution of "Income-tax Officer" with "Assessing Officer" with effect from 1 April 1988.

Meaning and legal effect of Section 245J

The provision authorises the jurisdictional Assessing Officer to recover amounts payable under a settlement order passed under section 245D(4). Recovery is subject to any payment conditions stated in the settlement order. Where payment is not made as required, the applicable provisions of Chapter XVII govern recovery and any penalty for default.

Explanation of related legal provisions

Section 245C - Application for settlement

This provision governed an eligible applicant's application for settlement of a case. Section 245J identifies the Assessing Officer by reference to the person who made that application.

Section 245D(4) - Order of settlement

Sub-section (4) provides for a settlement order after consideration of the prescribed material and proceedings. The amount and payment conditions recorded in that order are central to recovery under section 245J. Read the official section 245D.

Chapter XVII - Collection and recovery of tax

Chapter XVII contains statutory machinery for tax collection and recovery, including provisions dealing with demands, defaults and recovery procedures. Section 245J applies this framework to sums due under a settlement order, subject to the terms of that order and the applicable statutory requirements.

Assessing Officer

The Assessing Officer is the income-tax authority having jurisdiction over the applicant under the Act. Section 245J assigns recovery and applicable default-penalty functions to that officer.

How recovery under Section 245J works

Identify the order: Confirm that a settlement order under section 245D(4) specifies the amount payable.
Check the conditions: Review due dates, instalments and any other conditions in the order.
Verify payments: Reconcile payments already made with the amount remaining due.
Apply the statutory process: If the sum remains unpaid, the jurisdictional Assessing Officer may pursue recovery and any applicable penalty in accordance with Chapter XVII and the governing order.

Position following the 2021 settlement reforms

The Finance Act, 2021 ended the operation of the Income-tax Settlement Commission from 1 February 2021 and introduced section 245AA for Interim Boards to deal with qualifying pending applications. Section 245D(9) adapts specified settlement procedures for those applications. Accordingly, the date and nature of the application, the authority that issued the order and the relevant transitional provisions should be examined before deciding how a particular order is enforced.

For the official legislative text, see the Income-tax Act, 1961 as amended by the Finance Act, 2025. For subsequent periods, verify the legislation and savings or transitional provisions applicable to the assessment or tax year concerned.

Frequently asked questions

Can an amount specified in a settlement order be recovered?

Yes. Section 245J permits recovery of sums specified in an order under section 245D(4), subject to the conditions stated in that order and the applicable recovery provisions.

Who can recover the amount?

The Assessing Officer having jurisdiction over the person who applied for settlement under section 245C.

Does every delay automatically result in a penalty?

No automatic penalty is created solely by this section. Any penalty for default must be imposed and recovered in accordance with the applicable provisions of Chapter XVII and the facts of the case.

Is Section 245J the same as Section 245I?

No. Section 245I concerns the conclusiveness of settlement orders, while section 245J concerns recovery of amounts payable under those orders.

Official legal references

Disclaimer: This article provides general legal information. Recovery consequences depend on the terms of the settlement order, relevant statutory provisions and the applicable period.