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2017 (12) TMI 675 - HC - Income TaxNotice under Section 226 (3) - second respondent is due and payable of the income tax and certain monies of the second respondent were lying with the hands of the petitioner/Bank - Held that:- As per recent amendment to Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFAESI Act) viz., Section 20 E, and Section 31 B of the Recovery of Debts and Bankruptcy and Financial Interest Act (RD & BFI Act), the secured creditor shall have precedence over all dues, over the Central and the State Government. Also the petitioner, being a secured creditor, is entitled to exercise their rights under Section 35 of the SARFAESI Act, and the question of issuing notice under Section 226 (3) of the Income Tax Act does not arise. See case of Assistant Commissioner (CT) Anna Salai-III Assessment Circle Vs. The Indian Overseas Bank [2016 (12) TMI 373 - MADRAS HIGH COURT] Thus as there is no dispute to the fact that the petitioner is a secured creditor, and in such circumstances, they have precedence over all the dues, payable to the Central Government and the State Government. The impugned notice cannot be enforced against the petitioner/Bank, and it is held to be not sustainable in law. - Decided against revenue
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