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TMI Blog2025 (2) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... t appeal were riding. The seized amount was produced before the Judicial First Class Magistrate's Court. 3. On application by the Department under Section 132A of the Act, the Court directed release of the amount to the Department. Respondents 1 and 2 herein and others challenged the said order before this Court in Crl.M.C. Nos. 5605/2022 and 5591/2022. This Court as per order dated 21.12.2023, directed release of the cash to them on furnishing a bond for the amount. The amount was accordingly released. 4. Upon investigation and being satisfied that there was no explanation for the cash nor was it accounted, and after recording reason to believe that income chargeable to tax has escaped assessment, proceedings were initiated in relation to the same by the issuance of notice under Section 148 of the Act. 5. Finding that the expected demand on assessment including penalty would be a substantial amount exceeding two crores, the payment of which the assessees would evade, the competent authority of the Department, ordered provisional attachment of the Bank accounts of the assessees as per Exts.P7 and P8 orders of attachment under Section 281B of the Act. The said orders were cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is later. (3) Where the assessee furnishes a guarantee from a scheduled bank for an amount not less than the fair market value of the property provisionally attached under sub-section (1), the Assessing Officer shall, by an order in writing, revoke such attachment : Provided that where the Assessing Officer is satisfied that a guarantee from a scheduled bank for an amount lower than the fair market value of the property is sufficient to protect the interests of the revenue, he may accept such guarantee and revoke the attachment. (4) The Assessing Officer may, for the purposes of determining the value of the property provisionally attached under sub-section (1), make a reference to the Valuation Officer referred to in section 142A, who shall estimate the fair market value of the property in the manner provided under that section and submit a report of the estimate to the Assessing Officer within a period of thirty days from the date of receipt of such reference. (5) An order revoking the provisional attachment under sub-section (3) shall be made - (i) within forty-five days from the date of receipt of the guarantee, where a reference to the Valuation Officer has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur with the learned Single Judge. 9. 'Property' is a word of very wide connotation. In Jilubhai Nanbhai Khachar and Ors. v. State of Gujarat and Ors. AIR (1995 SC 142), the Apex Court held thus:- "42. Property in legal sense means an aggregate of rights which are guaranteed and protected by law. It extends to every species of valuable right and interest, more particularly, ownership and exclusive right to a thing, the right to dispose of the thing in every legal way, to possess it, to use it and to exclude every one else from interfering with it. The dominion or indefinite right of use or disposition which one may lawfully exercise over particular things or subjects is called property. The exclusive right of possessing, enjoying, and disposing of a thing is property in legal parameters. Therefore, the word 'property' connotes everything which is subject of ownership, corporeal or incorporeal, tangible or intangible, visible or invisible, real or personal; everything that has an exchangeable value or which goes to make up wealth or estate or status. Property, therefore, within the constitutional protection, denotes group of rights inhering citizen's relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kely demand, but there are sufficient funds in the bank account. The power for provisional attachment is provided to protect the interest of the revenue. There is no warrant to hold that money lying in a Bank account is not liable to attachment. 12. The mere fact that Bank account is not explicitly provided under Section 281B of the Act, unlike the GST Act, 2017 which specifically mentions the same, cannot lead to the conclusion that Bank account is not liable to be attached under Section 281 B of the Act. 13. On the above discussions we hold that money in Bank accounts is a property liable for provisional attachment under Section 281B of the Act. We are unable to concur with the finding of the learned Single Judge to the contrary. 14. Now we proceed to consider whether the security furnished before the Judicial First Class Magistrate's Court could be considered as sufficient security for the purposes of the Act. Section 451 of the Code of Criminal Procedure, 1973 which corresponds to Section 497 of the Bharathiya Nagarik Suraksha Samhitha, provides for interim release of property produced before any criminal Court. The interim order for custody in terms thereof is only regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cutory nature. 9. Even in cases of rival claims for interim custody, the preference made to one person does not settle any right to ownership or possession. Irrespective of defeat in a contest for interim custody, the defeated party can successfully enforce his claim for custody if ultimately he comes out with flying colours. The ultimate consideration is only who is the proper person considered by the Court for entrustment of the property. In doing so, the Court may have considerations like safety of the property, the possibility of getting it back without damage etc. The arrangement is being made by the Court only for preservation of property for being handed over to the person to whom custody has to be ordered under S. 452 after conclusion of trial or to be dealt with otherwise. ". The mere fact that pursuant to the orders of this Court in Crl.MC No.5605/2022, the Judicial First Class Magistrate's Court released the money to the assessee on furnishing security cannot have any significance in relation to the proceeding of the Income Tax Department under Section 281B of the Income Tax Act. Furnishing security before the Magistrate's Court is to ensure compliance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready been preferred challenging the assessment. The Department has, along with the memo dated 09.01.2025, placed on record the proposal and the approval of the authorities as required under Section 281B (1). It is seen that there has been a detailed consideration by the authority while granting approval for provisional attachment. At any rate, at this stage, when assessment has been completed and even an appeal has been filed, we do not think that the sufficiency or otherwise of the satisfaction arrived at by the authority while provisional attachment was ordered needs to be delved into. 16. For the reasons stated above, we are unable to agree with the conclusions arrived at by the learned single Judge. 17. Incidentally there arises a question as to what could be the expanse of the property over which attachment could be ordered. In Gandhi Trading v. Assistant Commissioner of Income-Tax and others (1999 SCC Online 967), a Division Bench of Bombay High Court held that the power of attachment under Section 281B of the Income Tax Act is a drastic power to be exercised with extreme care and caution, and that it should not be exercised as a tool to harass the assessee. It was also he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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