TMI Blog2016 (7) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the arrears or the whole of the money when it is equal to or less than the amount of arrears. In other words, in the process of seeking coercive recovery, the Assessing Officer would have power to recover the same to the extent of the arrears of the assessee from any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee. This power is essentially in the nature of garnishee order requiring the debtor of the assessee to make direct payment to the Assessing Officer of the arrears of tax instead of paying over such amount to the assessee. In essence, therefore, this power would be available when there is person from whom money is due or m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s. 226(3) issued by the respondent to the Allahabad Bank dt. 15-09-2014; b. Directing the respondent to withdraw the notice u/s. 226(3) issued by the respondent to the Allahabad Bank dtd. 15- 09-2014 qua Cash Credit account no. 50003029622, Term Loan A/c. No. 5003178046 Term Loan A/c. No. 50017597471; c. Directing the respondent to grant stay on the recovery of outstanding demand by disposing off the stay application preferred before it; d. Pending admission and final hearing of this petition, direct the respondent to grant stay on the recovery of O/s demand and withdraw the notice u/s 226(3) issued by the respondent to the Allahabad Bank dtd. 15-09-2014 qua Cash Credit account No. 50003029622, Term Loan A/c No. 5003178 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such accounts were either in the nature of cash credit account or term loan account and that, therefore, it cannot be stated that there was any money due to the petitioner from the bank which can be recovered in terms of sub section (3) of Section 226 of the Act. 4. Having heard learned counsel for the parties and having perused the materials on record we may notice that Section 226 of the Act pertains to other modes of recovery. Under sub section (1) of Section 226, where no certificate, as mentioned in Section 222 of the Act, is drawn up, the Assessing Officer may recover the tax by one or more of the modes provided in this section. The portion of Section 226, which is relevant for our purpose, reads as under: (3) (i) The [Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irement to the contrary. 5. Under clause (i) of sub section (3) of section 226, the Assessing Officer has power to issue notice requiring any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Assessing Officer forthwith upon the money becoming due or being held or within the specified time, so much of the money as is sufficient to pay the amount due by the assessee in respect of the arrears or the whole of the money when it is equal to or less than the amount of arrears. In other words, in the process of seeking coercive recovery, the Assessing Officer would have power to recover the same to the extent of the arrears of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax dues of the assessee from the overdraft account that the assessee maintained with its bank. In such background, referring to similar provisions contained in Section 46 of the Income Tax Act, 1922, it was observed as under: It will be seen that this provision is analogous to an attachment of a debt or what is commonly terms a garnishee summons. The classes of persons to whom such notice could be served are two: (i) any person from whom money is due or may become due to the assessee; and (2) any person who holds or may subsequently hold money for or on account of the assessee. The question which arises for consideration in the present case is, as to whether a bank, which has afforded overdraft facilities to its customer, holds the am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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