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TMI Blog2009 (12) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... rders in respect of properties belonging to these two petitioners have been passed are identical. For these reasons, writ petitions were heard together and by this common judgment, issues raised in all these writ petitions are dealt with. For the sake of brevity, we shall take note of the facts of Writ Petition (C) No. 8436 of 2009. 2. A search and seizure operation was conducted by the income-tax authorities at the office premises of Nimitya Properties Ltd. on November 6, 2008. Some documents were seized and the premises were sealed. Twenty days thereafter, i.e, on November 26, 2008, office premises of the petitioners were de-sealed. The documents were put in one almirah and restraint order was passed under section 132(3) of the Act. On December 30, 2008, the almirah was opened by the Deputy Director of Investigation (respondent No. 3) and documents were seized. It was followed by order dated February 6, 2009, issued under section 281B of the Act by the Income-tax Officer attaching the property No. 3, Avenue Cassia, Westend Greens, Rajokri, New Delhi. This order reads as under: "Sub: Order under section 281B of the income tax Act, 1961. In exercise of the power conferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on September 16, 2008, and no assessment proceedings had been taken up thereafter and no enquiry had been made so far. In any case, that assessment stood abated on the date of initiation of search as per the second proviso to section 153A(1) of the Act and thus assessment in respect of the assessment year 2007-08 was also not pending. 6. The petitioners also make a grievance that documents seized on November 6, 2008, had not been confronted and no question had been asked from them and no notice under section 153A or 153C had been issued. The petitioners have also referred to the instructions of the Central Board of Direct Taxes issued as addendum dated November 5, 2004, in which it is recommended that the provisions of section 281B should be resorted to only in cases where there is a reasonable likelihood of the recovery becoming difficult due to inadequacy of assets and where there are sufficient assets to cover the demand, the provisions of section 281B should not be resorted to, except under exceptional circumstances warranting the same. 7. On the basis of the aforesaid pleas taken in the petition, Mr. Salil Kapoor, learned counsel appearing for the petitioners, argued that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been able to produce today before us any order of the Commissioner by which the extension of the provisional attachment may have been granted. As the period of six months has expired, the provisional attachment ceases to be of any effect." 9. Mr. Sanjeev Sabharwal and Mr. Subhash Bansal, who appeared for the Revenue refuted the aforesaid submissions. We shall take note of their arguments while dealing with contentions of the learned counsel for the petitioner. 10. It would be apt to initiate the discussion by taking note of the provisions of section 281B. The relevant portion of this provision reads as under: "281B. Provisional attachment to protect revenue in certain cases.-(1) Where, during the pendency of any proceeding for the assessment of any income or for the assessment or reassessment of any income which has escaped assessment, the Assessing Officer is of the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, he may, with the previous approval of the Chief Commissioner, Commissioner, Director-General or Director, by order in writing, attach provisionally any property belonging to the assessee in the manner provided i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e- tax Act, 1922 (11 of 1922), or this Act, which may be pending on the date on which a search is authorized under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year." 12. The ambit and scope of the word "proceeding" is expanded by this Explanation to include not only those proceedings, which are pending on the date of attachment of the property, when the search is authorized under section 132, but also proceedings which may have been completed on or before such date and includes all proceedings under this Act, which may be commenced after such date in respect of any year. No doubt, proceedings in respect of the assessment year 200 7-08 stands abated because of the search. However, it is also a fact, which cannot be shied away from, that the proceedings for that assessment year will have to be initiated under section 153A or 153C of the Act. Such proceedings, which are to be necessarily commenced as a result of the search, are to be treated as proceedings under this Act. By virtue of Explanation to section 281B of the Act, these are to be treated as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that context, the suggestion was mooted by the Deputy Director for attachment of the property to protect the interest of the Revenue. However, the letter dated March 17, 2009, further mentions that "in view of the above facts and assessment pending for the assessment year 2007-08 the order of attachment was passed". Thus, when these facts were brought to the notice of the Assessing Officer, it is he who alone exercised his discretion finding it to be a fit case for attachment of the property in question. Therefore, it cannot be said that he was simply carried by the suggestion mooted by the Deputy Director and did not apply his own mind. 15. The fact situation in Gujarat Gas Co. Ltd. v. Joint CIT (Assessment)[2000] 245 ITR 84 (Guj) was entirely different. In that case, what was found is that the Central Board of Direct Taxes had issued instructions to the subordinate authorities directing that assessments to be made in a particular manner. This included the instructions that in scrutiny cases under section 143(3) of the Act, the income cannot be assessed at a figure lower than the returned income. Circular issued by the Central Board of Direct Taxes in exercise of powers under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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