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2019 (9) TMI 447 - HC - Income TaxNon releasing petitioner’s refund arising out of an intimation u/s 143 (1) - power to provisionally attach any property u/s 281 of an assessee to protect the interest of the revenue under certain circumstances HELD THAT:- Previously, the petitioner had filed a Writ Petition before this Court complaining about the department not showing sufficient urgency in processing the petitioner’s return for AY 2016-2017 which the petitioner expected would give rise to sizeable refund. High Court directed the respondents to complete the process expeditiously. Consequently, the intimation under section 143(1) of the Act gave rise to refund of a sum of ₹ 180 crores. With interest, this refund came to approximately ₹ 207 crores. Immediately, the department raised the possibility of invoking section 245 of the Act in order not to release the refund. The petitioner pointed out that the tax demands referred to in the communications proposing to invoke section 245 of the Act have all been stayed by the Tribunal under different interim orders. Under sub-section (1) of section 281B thus, where during the pendency of any proceedings for assessment or reassessment, the assessing officer is of the opinion that for the purposes of protecting the interest of revenue, it is necessary so to do, he may with the previous approval of the higher authority pass an order in writing provisionally attaching the property belonging to the assessee. These are drastic powers permitting the assessing officer to attach any property of an assessee even before the completion of assessment or reassessment. These powers are thus in the nature of attachment before judgment. assessing officer is most likely to confirm the demands while carrying out the final assessment of the petitioner’s return for the AY 2016-2017, we cannot lose sight of the fact that the demands for the previous assessments have been stayed by the Tribunal. The Tribunal has given reasons why it was persuaded to pass such interim orders. It is not possible for us to dissect the reasons of the Tribunal and come to the conclusion that in the final analysis, such demands would be confirmed. Permitting the department to provisionally attaching the petitioner’s refund for the current year on the ground that in the final assessment, the demands are likely to be confirmed, would amount to ignoring the hard fact that for the earlier assessment years, the Tribunal has suspended the recoveries arising out of the demands made by the assessing officer on similar issues. Looked from any angle, the occasion for the competent authority to exercise the drastic power under section 281B of the Act has not arisen. We do not doubt his power, however, we do not find proper justification for exercise of such power. Under the circumstances, the impugned order dated 26.10.2018 is set aside. The respondents shall release the refund arising out of the intimation under section 143(1) of the Act for the AY 2016-2017 with further statutory interest, if any, to be paid within two weeks from the date of receipt of a copy of this order.
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