TMI Blog2022 (9) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... notice from the Assessing Officer of the pendency of the assessment proceedings or without notice of any tax or other sums payable by such assessee. Such charge/transfer shall also not be void had it been made with the previous permission of the assessing officer. Upon a combined reading of the certificate and attachment in terms of Forms ITCP-1 and ITCP-16 respectively, the attachment in the present case is only of the rooms of the properties and there has been no attachment of any other property of the defaulting assessee. The question then that arises is as to what is the impact of a Rule 2 notice, such as the notice in the present case, which is an omnibus notice of demand. In light of the statutory embargo under Rule 68B, the attachment of the properties in question, 25 years from the elapse of the assessment years in question, is wholly impermissible in law. The question of competence or otherwise of the assessee to have made the transfers in 2008 and 2009 becomes irrelevant as on date today, seeing as the time frame set out under Rule 68B has long expired and the respondents have, admittedly not taken any action within the time provided. It must be noted that the sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs.C.Sanghamithirai, learned Special Government Pleader for R2. 5. The petitioners, having purchased the property in 2008 and 2009 are, admittedly, in undisturbed possession and enjoyment of the properties since the purchase. While this is so, they were in receipt of the impugned order dated 13.07.2009 attaching several tranches of properties, including the properties in question that had earlier stood in the name of the assessee including the properties purchased by the petitioners. It is as against the aforesaid attachment notice that the present writ petitions have been filed. 6. The petitioners have corresponded with the Department after having come to know of the impugned attachment, pointing out that they have purchased the properties in question and that the attachment is contrary to law. There has been no response to the representations. 7. The submissions of the petitioner are that (i) there is no justification whatsoever in law or on facts, for the Income Tax Department to have taken the impugned action (ii) the recovery is of arrears of an assessee unconnected to the petitioners (iii) the lands in question constitute private lands of the petitioners (iv) the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion. Admittedly, the attachments have been made after the date of purchase of the properties in question, the petitioner are unrelated to the defaulting assessee and there is no allegation whatsoever in regard to collusion between the parties. The purchase is bonafide and made for valuable consideration. 13. The scheme of the Act and Rules provide for framing of assessment and raising of disputes both pre-assessment, that is, pending proceedings for assessment, as well as post-assessment, that is, after an order of assessment has been passed and demand raised in terms of Section 156 of the Act. 14. Section 281B of the Act, protects the interests of the Department to the extent to which it invalidates any charge created upon, or alienation by an assessee of assets in his name, in favour of any other person. With effect from 01.10.1975, Section 281 was substituted and in the substituted form includes a proviso. 15. The proviso protects the interests of bonafide purchasers and states that the alienation of the property by an assessee shall not be void, if it has been made by such assessee for adequate consideration and without having received any notice from the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istinction between assessment and recovery under the Act. 19. The definitions of, nomenclature used, titles, roles and powers of the two officers are separate and distinct. An Income Tax Officer (ITO) is defined under Section 2(25) and the appointment is in terms of Section 117, both provisions extracted below: 2 (25) Income tax Officer means a person appointed to be an Income Tax Officer under section 117. Appointment of income-tax authorities. 117. (1) The Central Government may appoint such persons as it thinks fit to be income-tax authorities. (2) Without prejudice to the provisions of sub-section (1), and subject to the rules and orders of the Central Government regulating the conditions of service of persons in public services and posts, the Central Government may authorise the Board, or a Principal Director General or Director-General, a Principal Chief Commissioner or Chief Commissioner or a Principal Director or Director or a Principal Commissioner or Commissioner to appoint income-tax authorities below the rank of an Assistant Commissioner or Deputy Commissioner. (3) Subject to the rules and orders of the Central Government regulating the cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of attachment, as follows: Specification of Property All the Rooms an Resorts at Summer Creek, Poomparai Village, Kodaikanal belonging to the defaulter i.e. M/s.Club India Resorts Metro Hotels Ltd. 24. A combined reading of the Rule 2 notice and the attachment notice issued in terms of Rule 4, makes it clear that the attachment has only been of the rooms and resorts of the defaulting assessee. There is no mention of any other property that has been attached. Power of detention is set out under Rule 48 which provides for an order prohibiting the defaulter from transferring or charging the property in any way and prohibiting all persons from taking any benefit under such transfer or charge. 25. Upon a combined reading of the certificate and attachment in terms of Forms ITCP-1 and ITCP-16 respectively, I am of the view that the attachment in the present case is only of the rooms of the properties and there has been no attachment of any other property of the defaulting assessee. The question then that arises is as to what is the impact of a Rule 2 notice, such as the notice in the present case, which is an omnibus notice of demand. 26. A literal reading of Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Board may, for reasons to be recorded In writing extend the aforesaid period for a further period not exceeding three years: Provided further that where the immovable property is require to be re-sold due to the amount of highest bid being less than the reserve price or under the circumstances mentioned in rule 57 or rules 58 or where the sale is set aside under rule 61, the aforesaid period of limitation for the sale of the immovable property shall stand extended by one year. 29. Learned Senior Standing Counsel confirms her instructions to the effect that the demands have become final and that there have no appeals that have been filed by the defaulting assessee. In such a situation, and in light of the statutory embargo under Rule 68B, the attachment of the properties in question, 25 years from the elapse of the assessment years in question, is wholly impermissible in law. 30. The question of competence or otherwise of the assessee to have made the transfers in 2008 and 2009 becomes irrelevant as on date today, seeing as the time frame set out under Rule 68B has long expired and the respondents have, admittedly not taken any action within the time provided. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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