Guarantee to be used in a case where a person did not clear his tax liabilities.

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..... orm of guarantee to be executed by an employer was circulated. It was also clarified that this form of guarantee was to be used in a case where a person did not clear his tax liabilities before his departure and the tax clearance certificate was to be issued to him on the basis that satisfactory arrangements had been made to meet his current and anticipated tax liabilities. 2. Recently the Board .....

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..... ontains an undertaking that the guarantor "do hereby unconditionally and irrevocably guarantee due payment on demand. The important words here are "on demand" and as such the Income-tax Officer has to make a demand from the guarantor. The relevant provision which authorises the Income-tax Officer to name such a demand is section 156 of the Income-tax Act, 1961. There fore, the moment a demand is m .....

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..... chedule to the Income-tax Act, 1961, as stipulated in para 7 of the guarantee bond. (2) Where the guarantor does not make the payment, the Income-tax Officer should start proceedings under Second Schedule as if the guarantor was the defaulter and the Tax Recovery Officer should take coercive measures to recover the amount from the guarantor. In doing so, the Tax Recovery Officer would be acting .....

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