2024 (11) TMI 369 - HC - Income Tax

Provisional attachment orders u/s 281B - absence of extension of provisional attachment orders - HELD THAT - In the present case, the attachment orders were passed in terms of Section 281B (1) of the Act on 10.01.2024 and the said orders will be in existence for a period of six months in terms of Section 281B(2) of the Act. The respondents are empowered to extend the said provisional attachment orders for further period of two years by virtue of proviso to sub-section (2) of Section 281B of the Act. In the present case, admittedly, no such extension order has been passed before the expiry of the original provisional attachment orders dated 10.01.2024. Therefore, the said order would cease to have effect after expiry of the period of six months from the date of provisional attachment orders dated 10.01.2024. As rightly contended by the learned Senior Counsel for the petitioner, the period of six months from the date of impugned provisional attachment dated 10.01.2024, has been elapsed on 10.07.2024. Admittedly in the present case, after the expiry of six months of original provisional attachment orders in terms of Section 281B(2) of the Act, no further extension was made in terms of proviso to Sub-clause (2) of Section 281B of the Act. In the absence of any extension, the original provisional attachment orders dated 10.01.2024, shall cease to have effect after the period of six months, that is, from 10.07.2024 onwards, the said order has been ceased to have effect. Therefore, once the attachment order is ceased to have effect, the question of continuation of provisional attachment orders does not arise unless and otherwise, the Department extends the same in terms of proviso to Sub Section (2) of Section 281B. In the absence of extension of provisional attachment orders dated 10.01.2024, the same should ceased to have effect from 10.07.2024 onwards, i.e. after expiry of six months period. Of course, the original interim order granted by this Court, dated 15.02.2024 would continue as long as the impugned provisional attachment order is in existence.

Summary

Issues:
Challenge to provisional attachment orders under Section 281B of the Income Tax Act, 1961.

Analysis:
The judgment involved multiple writ petitions challenging provisional attachment orders dated 10.01.2024 passed under Section 281B of the Income Tax Act, 1961. The petitioner argued that the attachment orders would cease to have effect after six months from the date of the order, i.e., on 10.07.2024, as per the Act. The petitioner also highlighted that no extension order had been issued by the respondents, thus indicating that the attachment orders had lapsed. The respondents, on the other hand, sought liberty to take appropriate steps to extend the provisional attachment orders. The court considered both parties' submissions and examined the provisions of Section 281B of the Act.

The court noted that the provisional attachment orders were indeed passed on 10.01.2024 under Section 281B(1) of the Act, with a validity period of six months. The Act allows for an extension of these orders for up to two years under the proviso to sub-section (2) of Section 281B. However, in this case, no extension order was issued before the expiry of the original attachment orders. Consequently, the court agreed with the petitioner's argument that the attachment orders had ceased to have effect on 10.07.2024, as the six-month period had elapsed.

As per the court's analysis, since no extension was granted by the respondents, the provisional attachment orders dated 10.01.2024 automatically ceased to have effect after the initial six-month period. The court clarified that once the attachment orders lapsed, the interim order granted by the court would also cease to operate. Therefore, the court dismissed the writ petitions as infructuous, stating that there was nothing further to adjudicate since the provisional attachment orders had already lapsed. The judgment emphasized that the position as of the date of the judgment was that the attachment orders had ceased to have effect, leading to the dismissal of the petitions without costs.