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TMI Blog2019 (9) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) of section 281B thus, where during the pendency of any proceedings for assessment or reassessment, the assessing officer is of the opinion that for the purposes of protecting the interest of revenue, it is necessary so to do, he may with the previous approval of the higher authority pass an order in writing provisionally attaching the property belonging to the assessee. These are drastic powers permitting the assessing officer to attach any property of an assessee even before the completion of assessment or reassessment. These powers are thus in the nature of attachment before judgment. assessing officer is most likely to confirm the demands while carrying out the final assessment of the petitioner s return for the AY 2016-2017, we cannot lose sight of the fact that the demands for the previous assessments have been stayed by the Tribunal. The Tribunal has given reasons why it was persuaded to pass such interim orders. It is not possible for us to dissect the reasons of the Tribunal and come to the conclusion that in the final analysis, such demands would be confirmed. Permitting the department to provisionally attaching the petitioner s refund for the current year on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y stated that the return for this assessment year has been processed but it is pushed to what is stated as and styled as the Centralized Processing Center. That is stated to be forwarded for computation. 8. We fail to understand as to why somebody who is incharge of making and framing assessment, namely, the Assessing Officer can process the return and ordinarily empowered to finalize it as well but must forward it or push it to this center for computation. If computation such a difficult, if not an important task, why it cannot be performed by this Assessing Officer, is not clarified to us at all. It is evident that, after it is pushed to this center, from the centre s communication, copy of which is handed over Mr.Mohanty dated 7th August, 2018, it is apparent that this center has done nothing in relation to this computation. The said letter dated 7th August, 2018 is taken on record and marked X for identification. It may be lying with it until such time as the law permits holding up of the further proceedings or till the last date. We only remind the Revenue of the inherent risk in such an exercise. Far from making things simpler, we are of the opinion that such complicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression - any property belonging to the assessee. We would take a closer look at those sections later. 5. For the time being, we may record that the respondents while intimating the processing of the return under section 143(1) of the Act, appended a following note to the said communication: NOTE :- As per the records of CPC, the following demands are outstanding. An intimation under Section 245 of the Income Tax Act, 1961 has been issued separately proposing to adjust the outstanding demands against the refund determined as per this order. Since, the release of the refundable amount will be considered on the basis of your response/compliance to the Intimation U/s 245, you are requested to submit your response expeditiously. 6. As per this note, thus, the respondents proposed to adjust the said refund against outstanding tax demands in terms of section 245 of the Act and called upon the petitioner to respond to such proposal. This note also contained a table of various outstanding tax demands of the petitioner for different assessment years. 7. The petitioner responded to such note under a communication dated 29.11.2018. Referring to each of the seven outstandin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifiable reason. 11. On the other hand, the learned Counsel Shri Mohanty submitted that when the High Court previously ordered expeditious processing of the petitioner s return under the order dated 19.10.2018, it was clarified that the High Court has not examined the merits of the petitioner s claim of refund. He submitted that the demands are stayed by the Tribunal for various assessment years without entering into the merits of the assessments which were confirmed by the appellate Commissioner. He submitted that a scrutiny assessment of the petitioner s return for AY 2016-2017 would be over shortly. In this year also, there is every likelihood of sizeable tax demands arising in relation to the petitioner s international transactions and other issues which are already examined in the earlier assessment years. The department is, therefore, justified in carrying a bona fide belief that the assessment of the said return is likely to give rise to sizeable tax demands. In order to protect the interest of the revenue, the impugned order has been passed provisionally attaching the petitioner s refund. He submitted that the final assessment after scrutiny alone, can give a legal shape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the petitioner s refund would amount to overreaching the interim orders passed by the Income Tax Appellate Tribunal. As long as the stay against the recoveries was in operation issued by the competent appellate authority, Tribunal or Court, it would not be open for the department to enforce the recoveries through the aid of section 245 of the Act. Perhaps, it was not necessary for us to elaborate on this since advisedly, the department has given up this line of action for refusing refund to the petitioner. 15. These brief comments were however, necessary since the department seeks to press in service the power of provisional attachment under section 281B of the Act and in context of which, the Counsel for the department has taken us through the nature of interim orders passed by the Tribunal. Section 281B of the Act pertains to provisional attachment by the revenue in certain cases. Subsection (1) of section 281B reads as under: 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the final assessment of the petitioner s return for the AY 2016-2017, we cannot lose sight of the fact that the demands for the previous assessments have been stayed by the Tribunal. The Tribunal has given reasons why it was persuaded to pass such interim orders. It is not possible for us to dissect the reasons of the Tribunal and come to the conclusion that in the final analysis, such demands would be confirmed. Permitting the department to provisionally attaching the petitioner s refund for the current year on the ground that in the final assessment, the demands are likely to be confirmed, would amount to ignoring the hard fact that for the earlier assessment years, the Tribunal has suspended the recoveries arising out of the demands made by the assessing officer on similar issues. It may be that before doing so, the Tribunal has either put the petitioner to some terms or has found itself satisfied that the deposits already made are sufficient. Nevertheless, looked from any angle, the occasion for the competent authority to exercise the drastic power under section 281B of the Act has not arisen. We do not doubt his power, however, we do not find proper justification for exer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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