Government securities u/s. 46(5A)/226(3). - Income Tax - 400/CBDT

INSTRUCTION NO. 400/CBDT Dated: April 1, 1972 Section(s) Referred: 226(3) ,46(5A) Statute: Income - Tax Act, 1961 Attention is invited to Board's circular No. 25 (LXXIII-6) D of 1961 (F. No. 16/33/58-IT) dated the 23rd August, 1961 wherein the question of attaching Government securities u/s. 46(5A) has been dealt with. It was explained that when a Bank which also acts as a Public Debt Office holds Government securities on behalf of the assessee the real debtor is the Government and the Bank merely acts as the agent of the Government and the Bank cannot be said to be the debtor of the assessee. Consequently no notice u/s. 46(5A)/226(3) can be issued to a Bank. Inspite of the above clarification it is brought to the notice of the Board that notices u/s. 46(5A)/226(3) are continued to be issued to the Reserve Bank of India attaching the Government securities held by the Bank. In view of the above the Board desire that notices u/s. 46(5A)/226(3) should not be issued on the Bank as such notices are not in accordance with the law. The securities themselves can be attached by the Tax Recovery Officer in exercise of the powers conferred on him. These instructions may please be brought to the notice of all the officers working in the charge.