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TMI Blog2019 (8) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... 81-B of the Act, thereby removing the attachment of the Petitioner s assets mentioned therein and in particular also removing the attachment of the bank accounts by Respondent No.1 in exercise of powers u/s 226 (3) of the Act. Aggrieved by the order declining to stay the demand, the Petitioner has approached the Principal CIT by way of a petition, which is pending consideration. The said petition may now be disposed of expeditiously, in accordance with law. Writ petition is allowed in the above terms. - W.P.(C) 7909/2019 & CM Appl. No. 32777/2019 (interim relief) - - - Dated:- 31-7-2019 - S. MURALIDHAR AND TALWANT SINGH JJ. Petitioner Through: Mr. M.P. Rastogi, Mr. Rohit Jain, Mr. K.N. Ahuja, Mr. Aniket D. Agrawal, Ms. Kannopriya Gupta Mr.Manu K. Giri, Advocates Respondents Through: Mr. Raghvendra Singh, Sr. Standing counsel Mr. Vipul Agrawal, Junior standing counsel ORDER Dr. S. Muralidhar, J.: 1. This is a petition by M/s Dabur Invest Corp, questioning the order dated 15th January, 2019 passed by the Additional Commissioner of Income Tax Special Range-16 (Respondent No.1) under Section 281-B of the Income Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates that in the Assessment Year (AY) 2017-2018 it disclosed the long-term capital gain on sale of 23% stake in Aviva. 5. The Petitioner states that the returns filed for AYs 2005-06, 2006-07, 2008-09, 2011-2012, 2013-2014 and 2014-2015 were picked up for scrutiny and assessments were completed under Section 143 (3) of the Act. The Petitioner states that along with the returns, copies of Annual Accounts were filed. In the notes on accounts, the Petitioner had disclosed about the JV and had also disclosed that the interest paid on borrowed funds for acquisition of shares had been capitalized and included in the cost of investment. In the notes, disclosure was also made about the receipt of option money from the CUIH. It was stated that adjustments would be made at the time of reduction of the shareholding in Aviva. 6. The Petitioner states that during the course of assessment proceedings, the Assessing Officer (AO) raised a query about the JV. Copies of the JV agreements were made available to the AO from time to time. For the first time, while framing the assessment for AY 2015-2016, by order dated 31st December, 2017 the AO, who succeeded the earlier AO, was of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner to Respondent No.1 in January, February and March, 2019. In the petition dated 5th March, 2019, the Petitioner offered encashment of FDR of ₹ 163.5 crores with Standard Chartered Bank and also requested to adjust the sum of ₹ 152.22 crores, being 20% of the demand in the above years. The Petitioner also sought refund of the balance of ₹ 11.28 crores. 12. On 29th March, 2019 the Petitioner further made a representation to the AO for vacation of the impugned order and for release of bank accounts, which had stood attached by the order dated 15th January, 2019. It was pointed out that the assessment had already been completed in February, 2019 and that a further order passed under Section 263 of the Act for AYs 2013-2014 and 2014-2015 had already been quashed by the ITAT by an order dated 11th March, 2019. The Petitioner in the same letter also objected to the action under Section 226 (3) of the Act by Respondent No.1 and withdrawal of ₹ 164.87 crores from Standard Chartered Bank and ₹ 20.16 lakh from HDFC Bank without intimation to the Petitioner. 13. On 29th March, 2019 the Petitioner filed stay application before Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e demand respectively. 5. Learned counsel for the Petitioner further points out that for two of the AYs i.e. 2013-14 and 2014-15, the Assessee has succeeded before the ITAT and the Revenue's appeals against the order dated 11th March 2019 of the ITAT are pending in this Court. He submits that for the said two AYs, a refund of ₹ 79 crores de hors interest is due to the Assessee and he is willing for the adjustment of the entire refund amount +interest against the demand for the AYs in dispute. He points out that the Respondents have nevertheless proceeded to freeze all the accounts of the Petitioner making it impossible for it to function. 6. Learned counsel for the Respondents states that he will have to seek instructions. List on 30th July 2019. 17. Mr. M.P. Rastogi, learned counsel for the Petitioner, points out that the attachment of all of the assets of the Petitioner during the pendency of the assessment proceedings and its continuation even after the completion of assessment, was totally illegal and contrary to Section 281-B of the Act. The power had been exercised unreasonably. It was submitted that once the final assessment was fra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... frozen. The Petitioner had been pushed to a financially precarious situation. His submission was that the Respondents having already collected over ₹ 185 crores, there was no justification for them to continue to invoke the powers under Section 281-B of the Act. 21. The above submissions have been considered. Section 281-B (1) and (2) of the Act read as under: Provisional attachment to protect revenue in certain cases. 281B. (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 Principal Chief Commissioner or Chief Commissioner, Principal Commissioner or Commissioner, Principal Director General or Director General or Principal Director or Director, by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the Second Schedule. 2) Every such provisional attachment shall cease to have effect after the expir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order under Section 281-B of the Act. The following observations in the said decision explain the legal position: 9. A plain reading of Section 281B of the Act clearly spells out that the Assessing Officer is empowered to pass order for provisional attachment to protect the interests of the revenue in certain cases 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. However, the Assessing Officer is required to form an opinion that the same is necessary for the purposes of protecting the interests of the revenue. 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. 11. The above circular clearly envisages that where during the pendency of any proceeding for assessment or reassessment of any income, the raising of demand is likely to take time due to investigations ..... X X X X Extracts X X X X X X X X Extracts X X X X
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