2011 (2) TMI 1187 - HC - Income Tax

Assessments - For realising the amounts, attachments were effected on various items of immovable properties, belonging to the petitioners, their wives and other family members - apart from the assessments, proceedings for imposing penalty against the petitioners were already initiated and such amounts are also to be secured - petitioner had approached the 1st respondent through various requests to release the attachments on the basis of specific offer to furnish Bank guarantee for the amounts due under the orders of assessment Held that - Writ petition is disposed of directing the 1st respondent to consider the request made by the petitioner for release of the attachment on the basis of the offer for furnishing Bank Guarantee for the demand now pending. 1st respondent will consider the request and take appropriate decision, if the petitioner furnishes the Bank Guarantee for the existing demands. The release of the attachment can be considered after retaining any items of properties which are sufficient to cover the probable demand in case any penalty is imposed

Summary

Issues:
1. Assessment completed under Section 143(3) read with Section 153A of the Income Tax Act.
2. Attachments made on immovable properties due to assessments.
3. Petitioners' request for release of attachments based on offering a Bank Guarantee.
4. Dispute over the release of attachments and imposition of penalties.
5. Court's direction to consider the request for release of attachments.

Analysis:
1. The assessments in both cases were completed under Section 143(3) read with Section 153A of the Income Tax Act, leading to the issuance of Ext.P2 series orders. Subsequently, attachments were made on various immovable properties owned by the petitioners, their wives, and other family members through Ext.P3 series notices in both cases.

2. The petitioners contended that the assessed amounts in both cases were less than Rs.15 lakhs each. They approached the 1st respondent requesting the release of attachments by offering to furnish a Bank Guarantee for the amounts due under the assessment orders. However, the 1st respondent did not agree to release the attachments, leading to the filing of writ petitions.

3. The respondents argued that proceedings for imposing penalties against the petitioners were already initiated, and the amounts for penalties also needed to be secured. Despite the offer of a Bank Guarantee for the tax amount assessed, the attachments could not be released as per the respondents' contention.

4. The petitioners' counsel argued that retaining the attachment on any one of the properties would be sufficient to cover any potential demand arising from all proceedings. The Court considered these arguments and directed the 1st respondent to make a decision regarding the release of attachments based on the offer to furnish a Bank Guarantee and to retain attachment on properties worth enough to cover potential liabilities in case of penalties.

5. The Court disposed of the writ petition by instructing the 1st respondent to evaluate the request for releasing attachments upon the petitioner providing a Bank Guarantee for the existing demands. The release of attachments could be considered after retaining properties sufficient to cover potential demands if penalties were imposed. A decision on this matter was required within two weeks from the date of the judgment.