INCOME TAX ACT, 1961

Section 281

Recovery - Certain transfers to be void - Provisional attachment of bank account of assessee -

Assessee was aggrieved by an assessment order passed by the income-tax department and subsequent demand notice under section 156 and also aggrieved by an attachment notice that was issued under section 281B prior to passing of the assessment order. During the assessment hearings, several queries were raised upon assessee wherein assessee furnished its reply. Upon perusal of the response of assessee, notice was issued under section 142(1). It is to be noted that in the earlier show-cause notice, taxability of a sum had been raised under section 28(iv). Hearing was granted to assessee and after perusal of records, assessment was completed under section 143(3) and subsequent to the same, computation was completed. In the meantime an order for provisional attachment was issued under section 281B attaching the bank account of the petitioner Held: Supreme Court in case of Balmiki Prasad Singh [(2018) 259 Taxman 372 (SC) : 2018 TaxPub(DT) 7299 (SC)] upheld the order of the High Court setting aside the assessment order on the grounds of violation of the principles of natural justice. In the present case, there was no such violation of principles of natural justice, and therefore, judgment has no precedential value. With regard to provisional attachment, reasons recorded by officer were not acceptable as this was a provision to be used only in rare situations where the bona fide of assessee was in question. Officer had himself changed the goal post by first charging the amount under section 28(iv), and thereafter, under section 28(ii)(a). Therefore, attachment order was quashed and set aside.

REFERRED : ACIT v. Balmiki Prasad Singh (2018) 259 Taxman 372 (SC) : 2018 TaxPub(DT) 7299 (SC) CIT & others v. Chhabil Dass Agarwal (2014) 1 SCC 603 : 2013 TaxPub(DT) 2200 (SC) UOI v. Guwahati Carbon Ltd. 2012 (278) ELT 26(SC) : 2012 TaxPub(EX) 371 (SC) Vodafone Idea Ltd. v. DCIT & Ors. Writ Petition No. 2036 of 2019 : 2019 TaxPub(DT) 6118 (Bom-HC) B.A. Mohota Textiles Traders Pvt. Ltd. v. DCIT (2017) 248 Taxman 490 (Bombay) : 2017 TaxPub(DT) 1734 (Nag-Trib) CIT v. Ashwani Chopra & Others (2013) 352 ITR 620 (P&H) : 2013 TaxPub(DT) 0786 (P&H-HC) CIT v. Sachin P. Ambulkar (2014) 221 Taxman 67 (Bombay) (MAG.) and Padmanabha Udupa v. ITO (2010) 189 Taxman 408 (Kerala) : 2010 TaxPub(DT) 0707 (Ker-HC) CIT v. Kay Arr Enterprises & Ors. (2008) 299 ITR 348 (Madras) : 2008 TaxPub(DT) 0795 (Mad-HC)

FAVOUR : In assessee's favour

A.Y. :

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