The Income Tax Officer, Ward-I(2) v. T.senthil Kumar

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURTDATED : 28.03.2019CORAMTHE HONOURABLE DR. JUSTICE VINEET KOTHARIand THE HONOURABLE MRS.JUSTICE T.KRISHNAVALLI W.A.(MD) No.1268 of 2014andM.P.(MD).Nos.1 & 2 of 2014 1.The Commissioner of Income Tax-1, Income Tax Office, No.44, Williams Road, Cantonment, Trichirappalli-01. 2.The Income Tax Officer, Ward-I(2), No.16B Chinna Andal Koil Road, Karur.... Appellants/Respondents -vs- T.Senthil Kumar ... Respondent/Writ petitioner----- PRAYER:Appeal is filed under Clause 15 of Letters Patent, to setaside the order dated 25.06.2014 in W.P.(MD)No.1455 of 2014 on thefile of this Court. Prayer in WP(MD)No. 1455/ 2014 : Writ Petition is filed under Article 226 of theConstitution of India, praying this Court to issue a writ ofCertiorarified Mandamus call for the records of the 2nd respondentin P.A.No.AVQPS22344J/I(2)/KRR dated 26/11/2013 corrigendum orderissued on 2.12.2013 quash the same and further direct therespondents to lift the attachment order made U/s.281 B of theIncome-Tax Act. ----- For Petitioner :Mr.N.Dilip KumarFor Respondents :Mr.N.Shanmugaselvam ----- JUDGEMENT [Judgment of the Court was delivered by DR.VINEET KOTHARI, J.] The Revenue has filed this writ appeal against the order of thelearned Single Judge dated 25.06.2014, whereby, the learned SingleJudge allowed the writ petition filed by the Assessee against thehttps://hcservices.ecourts.gov.in/hcservices/provisional attachment of the property, namely residential flats, inwhich, the Assessee was carrying on his business. 2. The provisional attachment order under Section 281B of theIncome Tax Act, 1961 (hereinafter referred as "the Act") was issuedon 29.10.2013, soon after the notices under Sections 147 and 148 ofthe Act for the Assessment Years 2011-12 and 2012-13 were issued.The said provisional attachment of the property was challenged bythe Assessee on the ground that neither any notice was issued underSection 143(2) of the Act nor an assessment order was passed raisingany demand. 3. Mr.N.Dilip Kumar, learned counsel for the appellantsubmitted that Section 281B of the Act provides for provisionalattachment of the property of an Assessee against whom order hasbeen issued in order to protect the interest of the revenue and suchprovision permits the provisional attachment of the property evenbefore the assessment is framed. He further submitted that once thenotice for reassessment was issued to the Assessee on 24.10.2013,the provisional attachment order was issued immediately, namely on29.10.2013 and therefore, the learned Single Judge has erred inquashing the same. 4. The learned counsel for the respondent, Mr.N.Shanmugaselvam,submitted that the Tax Recovery Officer was not justified in issuingthe provisional order of attachment of the residential flats, as theAssessee, who was engaged in the business of real estate, wascompletely crippled due to the attachment order, which was passedwithout raising any demand against the assessee as on that date andtherefore, the provisional attachment was bad in law. He furthersubmitted that after the writ petition was allowed by the learnedSingle Judge, the Assessee had sold all the residential flats inquestion and the reassessment orders were also passed by theCommissioner of Income Tax for three assessment years, out of which,notices were issued for the assessment years 2011-12 and 2012-13 on25.10.2013 and notice was issued for the assessment year 2013-14, on31.03.2015, against which, the Assessee has preferred appeals andthe same are pending before the Commissioner of Income Tax(Appeals). 5. The learned counsel for the appellant does not dispute thefacts of subsequent reassessment orders passed by the learnedCommissioner of Income Tax dated 31.10.2015 for the three assessmentyears in question and he further submitted that huge demands havebeen made against the assessee and against these demands dated31.10.2015, appeals have been filed by the assessee and they arealso pending before the Commissioner of Income Tax (Appeals). 6. We have heard the learned counsel on both sides and alsoperused the records. 7. Section 281B of the Act is quoted below for ready reference:https://hcservices.ecourts.gov.in/hcservices/“Provisional attachment to protect revenue in certain cases: 281B:(1)Where, during the pendency of anyproceeding for the assessment of any income or for theassessment or reassessment of any income which hasescaped assessment, the [Assessing] Officer if of theopinion that for the purpose of protecting theinterests of the revenue, it is necessary so to do, hemay, with the previous approval of the [PrincipalChief Commissioner or] Chief Commissioner, [PrincipalCommissioner or] Commissioner, [Principal DirectorGeneral or] Director General or [Principal Directoror] Director], by the manner provided in the SecondSchedule. (2) Every such provisional attachment shall ceaseto have effect after the expiry of a period of sixmonths from the date of the order made under sub-section(1).” 8. A bare perusal of the provision of Section 281B of the Actwould reveal that it provides for a provisional attachment of theproperty of the Assessee to protect the interest of the revenue,during the pendency of other proceedings for assessment orreassessment. The requirement of passing of the final order orreassessment order before issuing attachment under this provision isnot envisaged in this section. Section 281B of the Income Tax Act,1961 is akin to attachment before judgment provided under Order 38of the Civil Procedure Code, where an attachment of the property ofthe defendant can be made even at any stage of suit, in order toprotect the interest of a decree holder, when such decree is passed,later on. 9. The Provisions contained under Sections 220 to 232 of theAct, are different from the provisions in Chapter XXIII of theIncome Tax Act, 1961, which deals with 'Miscellaneous' in Sections281 to 298. The provisions in Chapter XXIII under the head'Miscellaneous' assist in the effective implementation of the otherprovisions of the Act. Therefore, the learned Singe Judge, withgreat respect, appears to have erred in holding that provisionalattachment under Section 281B of the Act also could not be madewithout serving a Notice for Demand under Section 156 of the Act.To this extent, the contention of the learned counsel for theappellant/Revenue deserves to be accepted and the order under appealdeserves to be set aside. 10. As far as the recovery of dues from the Assessee isconcerned, since reassessment orders have already been passed by theAssistant Commissioner of Income Tax on 25.10.2013 and 31.03.2015against which, first appeals are also pending before theCommissioner of Income Tax (Appeals), the parties are left free tohttps://hcservices.ecourts.gov.in/hcservices/have their respective course in those proceedings and the same isnot required to be interfered with in any manner by this Court. 11. Therefore, the writ appeal filed by the revenue/Income TaxDepartment is partly allowed only to the extent indicated above.There shall no order as to costs. / True Copy / Sd/- Assistant Registrar (AS) Sub Assistant Registrar(CS) +1 CC to M/s.N.DILIP KUMAR, Advocate(SR-57539[F] dated 28/03/2019 )+1 CC to M/s.N.SHANMUGA SELVAM,Advocate(SR-57904[F]dated 29/03/2019) W.A.(MD) No.1268 of 2014 AND M.P.(MD).Nos.1 & 2 of 2014 VS / kplES/SP/26.04.2019/4P/3C