9911796707
TMI Blog2012 (12) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... r adjudicating the controversy involved herein as pleaded in the writ petition may be noticed. The case of the petitioner is that it is an income tax assessee and is filing its returns since it was incorporated. On 30.9.2008, the petitioner had e-filed original return of Income for the assessment year 2008-09 which was subsequently revised on 31.3.2010 declaring income of Rs. 9,42,01,184/-. A draft assessment order under Section 144C of the Act was passed by the Assistant Commissioner of Income Tax, Gurgaon (ACIT) on 22.12.2011 for the assessment year 2008-09 wherein certain additions were made in the income returned. The petitioner had filed objections before the Dispute Resolution Panel (DRP) to the draft assessment order on 27.1.2012. Thereafter, DRP on 21.9.2012 passed an order Annexure P.8 under Section 144C(5) of the Act directing the Assessing Officer to complete the assessment in accordance with the directions passed by it. In the meantime, on 1.11.2012, respondent No.2 sent a proposal for provisional attachment of the assets of the petitioner under section 281B of the Act to respondent No.1 - Commissioner of Income Tax, Faridabad which was approved by him. On the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; ** ** ** 68. . . . . . . The proceedings in relation to the assets, which are seized, are different from those which are subject to attachment. The nature of the assets would justify the classification, so that, broadly speaking, in relation to those assets where it is not practicable to seize, they can be attached and those which can be seized can be taken possession of. In the case of the assets, which are subject to attachment, the period would, in any event, expire at the time of the completion of the assessment; thereafter, the matter would have to be dealt with under Section 226, if necessary. Even if attachment were to be continued, it would have to be continued under Section 226, as otherwise there would be a multiplicity of provisions for the same purpose and it would be wrong to attribute to Parliament an intention to provide multiple provisions for the same purpose. . . . . . ." According to the learned Senior counsel, Section 281B of the Act was inserted for safeguarding the interests of the revenue wherever it was thought b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were certain newspaper publications whereby it was published that Motorola Mobility India was disposing of its assets and trying to close its activities in India and therefore in that eventuality, recovery of liability created by the assessment order could not be made. According to the learned counsel for the revenue, the validity period of six months of the provisional attachment order dated 1.11.2012 would not be extinguished after the passing of the assessment order on 8.11.2012 as on the date of passing of order on 1.11.2012, it was validly passed which was to continue for six months. Reliance was placed on judgments of the Bombay High Court in Firoz Tin Factory and another v. Assistant Commissioner of Income tax and others, Writ Petition (Lodging) No.765 of 2012, decided on 26.3.2012 and M/s Balaji Universal Tradelink Pvt. Limited v. Union of India, Writ Petition (Lodg.) No.1424 of 2012, decided on 22.6.2012. 8. Examining the issue relating to validity period of provisional attachment order dated 1.11.2012, firstly, it would be expedient to refer to Section 281B of the Act which was inserted in the Statute by the Taxation Laws (Amendment) Act, 1975 w.e.f 1.10.1975 and it re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General or Director is to be obtained before passing the order for provisional attachment. Under Sub-section (2) thereof, the period during which the order remains operational has been provided which is six months from the date of the order made under Sub-section (1) of Section 281B of the Act. However, the Chief Commissioner or Commissioner or Director General or Director has been authorised, after recording reasons in writing, to extend the aforesaid period for further period or periods as in their opinion would be justified but the total period of extension shall not, in any case, exceed two years. In other words, according to the aforesaid provision, during the pendency of any assessment proceeding or proceedings in pursuance to reassessment that in order to safeguard the interests of the revenue, after recording reasons for the same in writing and seeking the approval from the concerned authority, an order for provisional attachment can be passed. 10. The scope and effect of the insertion of this provision was explained by the Board vide Circular No.179 dated 30.9.1975 as under:- "27. The Amending Act has inserted a new section 281B with a view to empowering the ITO to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had approached the High Court seeking stay of demand under Section 220(6) of the Act and prior thereto order of provisional attachment had been passed under Section 281B of the Act. The High Court while accepting that recovery was not to be effected during the pendency of the appeal, had observed that since there was provisional attachment order to which the petitioner had not objected to, therefore, during the pendency of the proceedings, no coercive steps would be taken against the petitioner for recovery of the demand. In those cases, it was not in issue whether the provisional order for attachment continues even after the passing of the assessment order. 13. In view of the above, the interpretation put by learned counsel for the revenue that even after the passing of the assessment order, provisional attachment order shall still remain in force for six months, does not merit acceptance and is, thus, rejected. It may be observed that since the order for provisional attachment has been held ineffective after 8.11.2012, it would not be necessary to delve into the merits of the controversy regarding whether the order of provisional attachment was bad or not in the facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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