2021 (6) TMI 229 - HC - Income Tax

Recovery proceedings - attachment orders - title deed seized by the respondents/revenue in exercise of the powers contained under Section 132(1)(c)(iii) - petitioner points out that, immovable properties can only be attached, albeit, provisionally by the respondents/revenue, if they choose to do so by exercising powers under Section 132(9B) of the Act, and not under Section 132(1)(c)(iii), as is sought to be done - HELD THAT - As revenue, says that via the order dated 19.04.2021, the Court directed the concerned officer to ascertain, as to whether the aforementioned 10 properties were disclosed in the income tax returns filed for the relevant AYs, and therefore, the said exercise was carried out. We are of the view that the first step that the concerned officer needs to take to expedite the proceedings is, to submit the appraisal report concerning the search to the petitioner s AO. Therefore, while we are issuing notice in the captioned application, the concerned officer is also directed to submit the appraisal report to the petitioner s AO within the next ten days. Revenue will also get the 7 properties, referred to hereinabove (apart from the 10 properties which are reflected in the subject title deeds), valued, so that one has an idea as to what is the security available to the respondents/revenue. Accordingly, issue notice. Mr. Hossain accepts service on behalf of the respondents/revenue

Summary

Issues: Compliance of order releasing title deeds, disclosure of properties and cash component, provisional attachment of properties, expedited transmission of appraisal report, valuation of properties, submission of appraisal report to AO.

Comprehensive Analysis:

Compliance of Order Releasing Title Deeds:
The petitioners sought compliance of an order for releasing title deeds of properties. Out of 10 properties, only 3 title deeds were released, with the remaining 7 held back due to an alleged undisclosed cash component. The petitioners contended that the properties were purchased in the financial year 2019-2020 and disclosed in the return for AY 2020-2021. They argued that any undisclosed cash component should be addressed in assessment proceedings under Section 69 or Section 28 of the Income Tax Act, 1961.

Provisional Attachment of Properties:
The respondents/revenue had provisionally attached 3 immovable properties and seized papers related to 4 other properties, securing approximately ?10 crores. The petitioners argued that immovable properties can only be provisionally attached under Section 132(9B) of the Act, not under Section 132(1)(c)(iii) as attempted. They emphasized the need for valuation of these properties to determine the security available to the revenue.

Expedited Transmission of Appraisal Report:
To expedite proceedings, the concerned officer was directed to submit the appraisal report regarding the search to the petitioner's AO within ten days. The petitioners stressed the importance of timely submission to allow for adequate response to any proposed additions by the AO before the assessment deadline of 31.03.2022.

Valuation of Properties:
Apart from the 10 mentioned properties, the 7 others were to be valued to ascertain the security available to the revenue. This valuation was deemed necessary for a comprehensive understanding of the financial implications and potential outcomes of the ongoing proceedings.

Conclusion:
The Court directed the concerned officer to submit the appraisal report promptly and instructed valuation of the properties to assess the revenue's security. The matter was listed for further proceedings on 02.08.2021, with timelines set for filing replies and rejoinders. The judgment aimed at ensuring procedural compliance, fair assessment, and timely resolution of the issues raised by the parties.