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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 ..... of Tax. Evidently, except for the property exempted from attachment under the Code of Civil Procedure, 1908(CPC), other properties are liable to attachment. Section 60 CPC provides the property liable to attachment. Noticeably, Section 60(1) CPC specifically states that money is an attachable property. Properties which are not liable to attachment have been specified in the proviso to the section. Therefore, money in Bank account is property liable to attachment. There could be instances where the assessee does not own immovable property sufficient enough to secure the likely 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. The mere fact that Bank account is not explicitly provided under Section 281B 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 281B of the Act. We hold that money in Bank accounts is a property liable for provisional attachment under Section 281B of the Act. We ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iated 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 challenged in the writ petition. The writ petition was allowed, against which the Department is in appeal. 6. We have heard Sri. A.R.L. Sundaresan, Additional Solicitor General assisted by Sri. Navaneeth N. Nath, Standing Counsel-IT, for the appellants and Sri. P. Reghunathan, learned counsel for the respondents. 7. Allowing the writ petition and quashing the provisional order of attachment, the learned Single Judge held:- (i) Bank account is not a 'property' under Section 281B, which could be subjected to provisional attachment. (ii) The interest of the revenue stood secured by the security furnished before the Judicial First Class Magistrate's Court. (iii) The records do not reveal that the opinion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 been made under sub-section (4); or (ii) within fifteen days from the date of receipt of guarantee in any other case. (6) Where a notice of demand specifying a sum payable is served upon the assessee and the assessee fails to pay that sum within the time specified in the notice of demand, the Assessing Officer may invoke the guarantee furnished under sub-section (3), wholly or in part, to recover the amount. (7) The Assessing Officer shall, in the interests of the revenue, invoke the bank guarantee, if the assessee fails to renew the guarantee referred to in sub-section (3), or fails to furnish a new guarantee from a scheduled bank for an equal amount, fifteen days before the expiry of the guarantee referred to in sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing, 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 to physical thing, as right to possess, use and dispose of it in accordance with law. In Ramanatha Aiyar's The Law Lexicon, Reprint Ed. 1987 at p. 1031 it is stated that the property is the most comprehensive of all terms which can be used, inasmuch as it is indicative and descriptive of every possible interest which the party can have. The term property has a most extensive signification, and, according to its legal definition, consists in free use, enjoyment, and disposition by a person of all his acquisitions, without any control or diminution, save only by the laws of the land, in Dwarkadas Srinivas's case this Court gave extended meaning to the word property. Mines, minerals and quarries are property attracting A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrary. 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 regarding custody pending the conclusion of the criminal proceeding. The scope and effect of an order under Section 451 Cr.P.C was explained by the Apex Court in V. Prakashan and K.P.Pankajakshan and Another (1985 CriLJ 951) thus: 7…………….S. 451 enables the Magistrate to provide for interim custody of such property pending conclusion of enquiry or trial. It is only a temporary arrangement and what is contemplated is only an interim provision to provide custody with a proper person as the Court thinks fit with liability to produce the property back as and when directed by the Court. The maximum duration of the arrangement is only till conclusion of the enquiry or trial. It follows that the arrangeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 production of the property on being ordered. The security so furnished before the Magistrate's Court in relation to the proceedings before the Court cannot be construed as enuring to secure a likely demand on assessment under Section 147 of the Act. Section 226 (4) of the Act authorises the Department to apply to a Court in whose custody there is money belonging to the assessee, to meet the tax due from the assessee. However, at the stage when the criminal proceedings have not culminated, it cannot be said that the security furnished before the Magistrate's Court for interim release of property is sufficient security. Moreover, Section 226 (4) would apply only when assessment is completed. And eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge. 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 held that the attachment should, as far as possible, be of immovable properties, and that attachment of Bank accounts and trading assets should be as a last resort. The Court noticed the distinction between an attachment under Section 281B of the Act and an attachment in the course of recovery proceedings. The following observations in the judgment are apposite. "... One thing is clear that this power should be exercised by the Assessing Officer only if there is a reasonable apprehension that the assessee may thwart the ultimate collection of the demand that is likely to be raised on completion of the assessment. The power of attachment under this section is in the nature of attachment before judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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