2015 (5) TMI 1039 - HC - Income Tax

Attachment of refund - Held that - As the petitioner is furnishing a Bank Guarantee of a Nationalized Bank for an amount of ₹ 105,95,04,390/- to the satisfaction of the Commissioner of Income Tax, the respondents would vacate the attachment of the refund of ₹ 105,95,04,390/- done under Section 281B of the Act. The Bank Guarantee furnished by the petitioner will be kept alive till the final disposal of the reassessment notices for the Assessment year 2008-2009 to 2011-2012 and for eight weeks thereafter. Once the Bank Guarantee in the above terms is furnished to the satisfaction of the Commissioner of Income Tax, Panaji, the Respondents/Revenue will hand over the three refund amounts aggregating to ₹ 105,95,04,390/- to the petitioner within one week thereafter.

Summary

Issues:
Challenge to orders under Section 281B of the Income Tax Act, 1961 regarding attachment of refunds for assessment years 2007-2008, 2008-09, and 2009-2010.

Analysis:
The judgment concerns three petitions challenging orders issued under Section 281B of the Income Tax Act, 1961, seeking to attach refunds due to the petitioner for different assessment years. The first order sought to attach a refund of &8377; 29,01,56,762 for 2007-2008, the second &8377; 51,30,88,859 for 2008-09, and the third &8377; 25,62,58,769 for 2009-2010. The petitioner raised concerns about the respondent's handling of the matter, alleging non-disclosure of facts in affidavits filed in response to earlier petitions. The court acknowledged the petitioner's grievances and emphasized the need for fairness and transparency in dealings with the assessee and the court.

The petitioner highlighted the urgent need for the refunds due to grave liquidity problems. To address the issue, the petitioner offered to provide security either through immovable properties or a bank guarantee. Eventually, the petitioner agreed to secure the revenue with a bank guarantee for 100% of the refund amount. The respondent, represented by learned counsel, agreed to this arrangement, indicating no objection to the bank guarantee proposal. Consequently, the court ordered that upon furnishing a bank guarantee from a Nationalized Bank for the specified amount to the satisfaction of the Commissioner of Income Tax, the attachment of refunds under Section 281B would be lifted. The bank guarantee would remain in force until the final disposal of reassessment proceedings for specific years and eight weeks thereafter. Once the bank guarantee was submitted satisfactorily, the revenue would release the refunds to the petitioner within one week.

In conclusion, the court made the rule absolute based on the terms outlined in the judgment, directing the parties to act as per the authenticated copy of the order. The judgment resolves the issues related to the attachment of refunds under Section 281B by providing a mechanism for securing the revenue's interests while ensuring timely access to the refunds for the petitioner.