Introducing the “In Favour Of” filter in Case Laws.
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Introducing the “In Favour Of” filter in Case Laws.
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of <h1>Guarantor Liable for Unpaid Taxes u/s 128 of Indian Contract Act; Proceedings Initiated if Payment Fails.</h1> The circular outlines the procedure for enforcing a guarantee when an individual fails to clear tax liabilities before departure. It refers to a revised guarantee form circulated earlier, which allows a tax clearance certificate to be issued based on satisfactory arrangements for current and anticipated tax liabilities. The circular clarifies that under Section 128 of the Indian Contract Act, a guarantor's liability is co-extensive with the principal debtor's. If taxes remain unpaid, the Income-tax Officer must demand payment from the guarantor. If the guarantor fails to pay, proceedings under the Second Schedule of the Income-tax Act, 1961, will be initiated against them.
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