9911796707
TMI Blog2004 (8) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... is quashed. Since the tax has already been paid, therefore, in the interest of justice, we direct the third respondent to calculate the face value of the units of the petitioner at Rs. 10 per unit and pay the difference to the petitioner. The writ petition is accordingly disposed of. - - - - - Dated:- 27-8-2004 - Judge(s) : BILAL NAZKI., P. S. NARAYANA. JUDGMENT The judgment of the court was delivered by BILAL NAZKI J. -A short question is involved in this writ petition. The petitioner is an assessee of the Income-tax Department. For the assessment years 1988-89 and 1990-91 to 1995-96 pursuant to the orders dated December 2, 1999, the second respondent determined the tax at Rs. 1,76,80,735 payable by the petitioner to the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to October, 2000. On January 31, 2002, he made a further deposit of Rs. 25 lakhs. The total amount deposited by him was Rs. 117.04 lakhs. Only a balance of Rs. 40.73 lakhs was due and the petitioner had units of the face value of over Rs. 65 lakhs. He was waiting for the orders of the Settlement Commission on the application made by him on February 4, 2002. In the meantime, it appears, the second respondent issued attachment proceedings under section 226(3) of the Income-tax Act on February 8, 2002, and the units of the petitioner with the third respondent were attached. The petitioner was neither aware of the same nor was given any notice. It was only on February 15, 2002, that the second respondent addressed a separate notice to the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nwarranted, unauthorised and without notice and consent of the petitioner. The original records pertaining to the units remained with the petitioner. The proceedings issued by the second respondent seeking attachment under section 226(3) of the Income-tax Act did not warrant the third respondent to resort to distress sale of the petitioner's units in such a hasty manner. The petitioner had invested Rs. 65 lakhs with the third respondent. The petitioner was also receiving the dividends on the units annually at Rs. 8,12,500 being 12.5 per cent, free from income-tax and as such besides having a loss of Rs. 21.31 lakhs because of the sale of his units, the petitioner has also suffered loss of income at Rs. 8.12 lakhs per annum by way of dividen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned notice by the Income-tax Officer was not money, but were the units held by the assessee with the third respondent. These units were transferable units and their value had not become due to the assessee on the day the notice was given. Thus, in our opinion, no money was due to the assessee from the third respondent at the time of the impugned notice, it would have become due on maturity of the units. Therefore, the whole exercise was illegal. The third respondent purchased the units held by the assessee prematurely without his permission, transferred the units to himself on a value decided by him and submitted some money to the Income-tax Department. That is not the purport of section 226(3) of the Act. Even the Income-tax Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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