9911796707
TMI Blog2016 (1) TMI 1158X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent assessee, the first petitioner should "pay to me forthwith any amount due from you to or, held by you, for or on account of the said assessee up to the amount of arrears...". It is the case of the petitioners that the first petitioner does not really hold any money for or on account of the proforma respondent or to the credit of the proforma respondent. The petitioners claim that in keeping with the seriousness of the request, the first petitioner has acknowledged the receipt of the notice of July 15, 2015 and has undertaken to not allow the proforma respondent to trade such units. The first petitioner has, however, in its letter of August 6, 2015 informed the income tax officer that no money is at present due from the first pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it representing one undivided share in the assets of a scheme. Regulation 37 provides for transfer of units. It recognises the free transferability of units both by acts of parties and by operation of law. Regulation 49 of the said Regulations requires the price at which the units may be subscribed or sold and the price at which they may be repurchased to be made available to the investors. Regulation 52A deals with dividends. The petitioners have also relied on a Supreme Court judgment reported at (2007) 10 SCC 101 (Administrator, Unit Trust of India vs. B. M. Malani), where, according to the petitioners, in similar circumstances involving units in the Unit Trust of India, the UTI was held liable for the premature encashment of the units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the investment may be described as units but it is relatable to a money equivalent at any point of time and, in such sense, it is as liquid as money and in view of the obligation of the noticee under Section 226(3)(i) of the Act, the first petitioner was liable to make over the money equivalent of the units held by the proforma respondent as at the time of the notice being received by the first petitioner. An exercise of assessment under the first clause of Section 226(3) of the Act involves the identification of a person on whom an obligation fastens under such provision and, thereupon, ascertaining the extent of the obligation of such person to comply with the demand contained in the notice. As to who may be liable to comply with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me due from the first petitioner to the proforma respondent without the proforma respondent exercising his choice or right of redeeming the units. Even if such condition is overlooked, to the extent that the first petitioner holds the units in the mutual fund on behalf, or for the benefit, of the proforma respondent, the first petitioner may be regarded as a person from whom money may become due to the assessee within the meaning of the provision. But the exercise of assessing the perceived liability of a noticee under Section 226(3) of the Act does not stop only upon identifying the person. The extent of the obligation of such person has also to be discerned from the provision. The second limb of the clause obliges such person as has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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