9911796707
TMI Blog2001 (7) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... g the bank accounts, movable and immovable properties of the society and its office-bearers when the assessment proceedings are still pending adjudication as illegal, arbitrary and unjustified and consequently set aside the same and pass such other order or orders as this court may deem fit and proper." The background facts leading to the filing of this writ petition briefly be noted as under: The assessment proceedings for the assessment year 199899 was completed by the second respondent on May 15, 1999, accepting the returns filed by the petitioner-assessee claiming exemption under section 11 of the Act. The Commissioner of Income-tax, the first respondent herein in exercise of the revisional power conferred upon him under section 263(1) of the Act revised the order of the second respondent and set aside the same on the ground that the assessment was made without proper appreciation of relevant facts which had a bearing on the assessability of the income in the hands of the petitioner-assessee and consequently remanded the proceedings to the assessing authority for fresh enquiry in the light of the directions given by him in the order. Against the said order, the assessee prefe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Trinity Bank in the name of the petitioner-society by ostensibly depositing his and his wife's personal property as a security. However, the investigation disclosed that the personal property offered by the executive secretary or his wife had already been mortgaged in favour of the LIC Housing Finance and the GIC Housing Finance, respectively, practically rendering the alleged security worthless. While there is partial default in repayment of the said loans, it has also come out in the investigation that even for the repayments made, if any, there has been no valid explanation with regard to sources. Since the Commissioner has directed enquiry into the whole gamut, the whole issue is being investigated by the Revenue in the assessment proceedings. which are pending before the assessing authority. Prima facie, the charge against the petitioner society of infracting section 13(1)(c) of the Act and consequential disentitlement for exemption has been made out by the Revenue. If the charge alleged is proved, it will result in an addition of Rs.1.7 crores and a demand to the tune of Rs.70 lakhs for the assessment year 1998-99. For the assessment year 1997-98, there were some such ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat otherwise it was open to the petitioner to operate its bank account except to the extent of the balance as of that date, was made clear by the second respondent by issuing a communication dated May 29, 2001, to the bank. Therefore, the assumption of the petitioner that the impugned order would militate against its functioning and its charitable activity, is not true and correct. The petitioner has so far received around Rs.50.70 lakhs as donations of which, only Rs.20 lakhs is under attachment. Therefore, having regard to these circumstances, the petitioner's activity is in no way affected by virtue of the impugned order. Sri K. Raji Reddy, learned counsel for the petitioner with his usual vehemence and tenacity would strenuously contend that the impugned action taken by the second respondent is totally arbitrary, illegal, unjustified and it has the effect of stalling the very function of the petitioner-society for which it is established. Learned counsel would submit that the effect of the attachment of the account is that the management of the society is not in a position to pay even current salary to its employees. Learned counsel would maintain that there was absolutely no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue. The order of provisional attachment will be made only after obtaining the approval of the Chief Commissioner or Commissioner or Director-General or Director. This provision has been made in order to protect the interests of the Revenue in cases where the raising of demand is likely to take time because of investigations and there is apprehension that the assessee may default the ultimate collection of the demand. In other words, this section gives a power to be exercised during the pendency of any proceedings for assessment or reassessment, so that the assessee did not fritter away or secret his resources out of the reach of the Department when the assessment or reassessment is completed. The expression "for the purpose of protecting the interests of the Revenue" occurring in section 281B of the Act is very wide in its meaning. For that reason as a safeguard, prior approval of a higher authority like Chief Commissioner, Commissioner. Director-General or Director, has been made a necessary condition. Further, the orders of provisional attachment must be in writing. However, as rightly contended by learned counsel for the petitioner, there must be some material on record t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that arises for our consideration is whether the second respondent has exercised the power conferred upon him under section 281B of the Act irrationally and without any justification. We do not think so. The facts stated in the counter affidavit of the second respondent which we have extracted above and the correctness of which is not denied by the petitioner-assessee speak for themselves and justify the drastic action taken by the second respondent by passing impugned orders under section 281B of the Act to protect the interests of the Revenue. It is relevant to note that according to the second respondent, the petitioner-assessee has so far received about Rs.50.70 lakhs as donations of which only Rs.20 lakhs is under attachment. Further as could be seen from the impugned orders, it is open for the petitioner to operate its bank account except to the extent of the balance as of that date and in that regard a communication dated May 29, 2001, was also sent to the concerned bank by the second respondent. Therefore, the assumption of the petitioner-assessee that the impugned order militates against its functioning and its charitable activities is not well founded. In the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
