TMI Blog2009 (12) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed a letter dated July 24, 2009, to the Commissioner of Income Tax pointing out about the attachment orders passed by the Assessing officer with the prior approval of Commissioner of Income Tax. It was further mentioned in this communication that in many of the group cases, the order under section 127 of the Act were yet to be passed, the case record yet to be received, further notice is to be issued, inquiries, investigations to be made and thereafter assessment order could be passed. The request was, therefore, made for extension to the provisional attachment. On this, the Commissioner gave his approval. The extension of the order of provisional attachment was valid. - 8435, 8436, 12172 and 12173 of 2009 and others - - - Dated:- 23-12-2009 - A. K.SIKRI and SIDDHARTH MRIDUL JJ. Salil Kapoor with Santa Kapur and Ms. Swati Kapoor for the petitioner. Sanjeev Sabharwal with Subhash Bansal for the respondents. JUDGMENT A.K. Sikri J. The two petitioners herein, viz., Nimitya Properties Ltd. and Nimitya Promoters Ltd., who belong to the same group, have filed two petitions each. In the first two petitions filed by these petitioners, the challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty No. 1, Golden Gates, West End Green, Rajokri, New Delhi. 4. According to the petitioners, the properties attached form part of stock in-trade and no tax was outstanding against the petitioners. Thus, letter dated February 10, 2009, was written bringing these aspects to the notice of the respondents and the respondents were also asked to provide reasons for attachment of the properties. This was followed by application/ letter dated March 4, 2009, requesting respondent No. 2 to withdraw the said orders dated February 6, 2009, but no response was received. Therefore reminder dated March 16, 2009, was also sent. In reply thereto, respondent No. 2 informed the petitioners, vide its letter dated March 17, 2009, that attachment orders have been passed on the basis of proposal received from respondent No. 3, vide letter dated December 30, 2008, informing that a large number of incriminating documents were seized and huge demand is likely to be raised under sections 153A and 153C and there was an apprehension that the petitioners may transfer the properties just to defer the payment of taxes. Therefore, respondent No. 3 had requested that to safeguard the interest of the Revenue, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o was not the competent authority, as such an extension order could be passed only by the Commissioner. Furthermore, even while passing the extension order, the assessee was not confronted with seized documents. He also referred to and relied upon the judgment of the Punjab and Haryana High Court in the case of Sukhpal Singh (HUF) v. CIT [1985] 156 ITR 480 wherein the court held that notices issued for provisional attachments of fixed deposit under section 281B were effective only for a period of six months and this period could be extended by the Commissioner of Income-tax only in exercise of his powers under sub-section (2) of section 281B of the Act and for want of material on the record to show that the Income-tax Officer had formed an opinion on the basis of some material that it was necessary to attach the property in order to protect the interest of the Revenue, notice for provisional attachment were unsustainable. The court held as under (page 481): "After hearing the learned counsel for the parties, in the circum stances of the case, we find force in the contention of the learned counsel for the petitioner. A bare perusal of the impugned notices would show that the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, that the total period of extension shall not in any case exceed two years:" 11. Sub-section (1) of section 281B authorizes the Assessing Officer to pass provisional order of attachment of property belonging to the assessee "during the pendency of any proceeding for the assessment of any income or for the assessment or reassessment of any income which has escaped assessment". This has to be done with the previous approval of the Chief Commissioner, Commissioner, Director-General or Director. The Explanation attached to sub-section (1) gives the scope of "proceedings" and categorically provides that proceedings under sub-section (5) of section 132 shall be deemed to be proceedings for the assessment of any income, etc., section 132 deals with search and seizure. In the present case, such search and seizure had taken place under the said provision and provisional attachment order is the consequence of that search and seizure. Therefore, the Explanation wherein reference to the provisions of section 132 is made becomes applicable in the instant case. Sub-section (5) of section 132 pro vides for making an order estimating the undisclosed income in a summary manner and calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Assessing Officer. This order is passed by him, as stated therein, in exercise of the power conferred upon him under section 281B of the Act. The petitioner, however, relies upon the letter dated March 17, 2009, addressed by the Assessing Officer to the petitioner in response to the petitioners' request to withdraw the aforesaid attachment. In this letter, the Income-tax Officer has mentioned that the property was attached on the basis of proposal received from the Deputy Director of Income-tax (Inv.) Unit-IV-3, New Delhi vide his letter dated January 5, 2009. Vide this letter, the Deputy Director had informed that the search and seizure operation was conducted on November 6, 2008, wherein a large number of incriminating documents and evidence regarding bogus credit entries were gathered and huge demand is likely to be raised under sections 153A and 153C of the Income-tax Act The Deputy Director had expressed the apprehension that just to defer the payments of tax the assessee may transfer the properties and, therefore, requested the Assessing Officer to attach the mentioned immovable properties to safeguard the interest of the Revenue. No doubt, after the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 17. This argument is found to be factually incorrect and militates against the record. We find that the Assistant Commissioner of Income-tax (Central Circle-22) had addressed a letter dated July 24, 2009, to the Commissioner of Income-tax pointing out about the attachment orders dated February 26, 2009, passed by the Assessing Officer with the prior approval of the Com missioner of Income-tax. It was further mentioned in this communication that in many of the group cases, the orders under section 127 of the Act were yet to be passed, the case records were vet to be received, further notices to be issued, inquiries, investigations to be made and thereafter only assessment orders could be passed. The request was, therefore, made for extension of the provisional attachment. On this, the Commissioner gave his approval on July 31, 2009, in the following manner: 'I have gone through the proposal of the Assessing Officer. In view of the facts mentioned in the proposal, I am satisfied that this is a fit case to extend the provisional attachment up to July 31, 2010. The Assessing Officer shall make efforts to complete the assessments as early as possible." 18. After the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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