2023 (9) TMI 158 - HC - Income Tax

Attachment orders issued u/s 281B - seeking to attach the assets of the petitioner along with the personal assets of its Directors - HELD THAT - The language of Section 281B (1) and (2) of the Income Tax Act, 1961 are clear and categorical. The order of attachment is to initially remain in force for a period of six months from the date of attachment provided other criteria in Sub-Section (1) are satisfied. In these cases, circumstances and criteria specified in Sub-Section (1) to Section 281B of the Income Tax Act, 1961 are satisfied. Since the respondents have issued subsequent orders/warrant of attachment of the same immovable properties by separate orders all dated 17.02.2023, nothing further remains to be adjudicated in these writ petitions. As such these writ petitions have become infructuous. As per proviso to sub-section (2) to Section 281 B of total period of extension cannot exceed two years or 60 days after the date of order of assessment or reassessment, whichever is later. In these cases, the first orders of attachment were under Section 281B of the Income Tax Act, 1961 made on 28.02.2022. It comes to an end on 27.08.2022. Assessment orders were passed on 31.12.2022. Fresh attachment orders were passed on 17.02.2023. These orders also would have come to an end on 16.08.2023. The remedy in these Writ petitions have worked out due to efflux of time. Thus, nothing survives for adjudication in these writ petitions. Even before 27.08.2022, impugned order dated 23.08.2022 was passed. The order would have come to an end on 22.02.2023, meanwhile, liberty is however given to the petitioners to challenge the subsequent orders dated 17.02.2023, in accordance with law. These writ petitions are closed with the above observations.

Summary

Issues involved:
The judgment deals with the validity of an attachment order issued under Section 281B of the Income Tax Act, 1961, and the subsequent extension of the attachment period.

Summary:

Attachment Order and Petitioner's Challenge:
The petitioner challenged an order of attachment dated 23.08.2022 under Section 281B of the Income Tax Act, 1961, which sought to attach the assets of the petitioner and its Directors. The petitioner argued that the order was issued without suitable intimation to the Sub Registrar Office, leading to the attachment reflecting in the encumbrance certificate.

Duration of Attachment and Assessment Orders:
The petitioner highlighted that the attachment order was made on 28.02.2022 and was in force until 27.08.2022. Subsequently, fresh attachment orders were issued on 23.08.2022. The petitioner had received assessment orders for the years 2020-2021 and 2021-2022.

Legal Submissions and Extension of Attachment:
The petitioner contended that the attachment order should have ended by 28.02.2023 as per the proviso to Section 281B(2) of the Act. However, the respondents argued that subsequent orders were passed under the same section, extending the attachment period.

Court's Decision and Observations:
The court noted that subsequent orders were issued on 17.02.2023, extending the attachment period, rendering the writ petitions infructuous. The court emphasized the provisions of Section 281B regarding the initial attachment period and the possibility of extension by the tax authorities.

Conclusion and Directions:
The court observed that the writ petitions had become infructuous due to subsequent orders extending the attachment period. The court allowed the petitioners to challenge the later orders dated 17.02.2023 if necessary. The writ petitions were closed with no costs awarded, along with the connected writ miscellaneous petitions.