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2020 (1) TMI 1160 - HC - Income TaxViolation of principles of natural justice - demand notice under Section 156 - attachment notice that was issued under Section 281B prior to passing of the assessment order - HELD THAT:- Income tax officer has not acted without jurisdiction. Whether such jurisdiction has been exercised incorrectly and/or there is an error in such exercise is a different issue to be tested under the statutory appeal available under the Act. The Supreme Court in Balmiki Prasad Singh [2018 (9) TMI 1936 - SUPREME COURT] 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 is no such violation of principles of natural justice, and therefore, the judgment has no precedential value in the present case. The extra ordinary jurisdiction under Article 226 of the Constitution is required to be sparingly used only when the Court finds that the action of the State is completed without jurisdiction, in violation of the principles of natural justice and/or the order passed is palpably illegal. In my view, none of the above conditions are applicable in the present case. Accordingly, I do not find any reason to interfere with the assessment order. With regard to the provisional attachment, the reasons recorded by the officer and the explanation given by Mr. Trivedi are not acceptable to me as this is a provision to be used only in rare situations where the bona fide of the assessee is in question or there has been a clear case of evasion of tax. Taxability of ₹ 74.5 crores is a debatable issue. The Income Tax officer has himself changed the goal post by first charging the amount under Section 28(iv), and thereafter, under Section 28(ii)(a). In a situation wherein the officer is himself not certain of the taxability, the use of a drastic provision such as Section 281B is not tenable. Moreover, no reasons have been provided in the attachment notice. Submission of Mr. Trivedi that the amount of tax being large, and therefore, the provisional attachment was resorted to, is not a good enough reason and is rejected by this Court. If the above reason were accepted then in all cases of high demands, provisional attachment would become the norm. I am unable to accept the logic, and therefore, the attachment order is quashed and set aside. Writ petition is disposed of with liberty given to the petitioner to file an appeal and stay petition before the Commissioner of Income Tax (Appeals) within a period of 30 days from date. The Commissioner of Income Tax (Appeals) is directed to grant an opportunity of hearing and thereafter pass a reasoned order in respect to the stay petition forthwith
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