No power to attach the property during pendency of appellate proceedings
Where assessee challenged assessment order on crucial aspects in appellate proceedings, it was to be directed that any order passed by revenue authorities under section 281B would not be enforced until a decision was taken by appellate authority on stay application filled by assessee
HIGH COURT OF KARNATAKA
Duo Meadows (P.) Ltd.
Income Tax Officer, Bengaluru*
WRIT PETITION NO. 2320 OF 2019 (T-IT)
APRIL 11, 2019
Section 281B of the Income-tax Act, 1961 – Provisional attachment to protect revenue in certain cases (Applicability of) – Assessment year 2016-17 – Assessee-company was engaged in business of development of immovable properties – Assessee was subjected to assessment under section 143(3) – Before passing of assessment order, an order was passed under section 281B attaching properties belonging to assessee in order to protect interest of revenue during assessment proceedings – Assessee filed instant petition contending that order under section 281B was a non-speaking order and thus void ab initio – It was noted that assessee had challenged assessment order on certain factual aspects which could not be examined under instant writ jurisdiction – Whether in aforesaid circumstances, assessee was to be relegated to appellate forum to assail impugned assessment order – Held, yes – Whether so far as assessee’s apprehension regarding enforcement of provisional attachment was concerned, authorities were to be directed that order passed under section 281B would not be enforced until a decision was taken by appellate authority on stay application filed by assessee- Held, yes [Paras 6 and 7] [Matter remanded]
Smt. Vani H., Adv. for the Petitioner. Jeevan J. Neeralgi, Adv.for the Respondent.
1. The petitioner has challenged the provisional attachment order dated 27.12.2018 passed under Section 281B as well as the Assessment order dated 28.12.2018 passed under Section 143(3) and the consequential demand notice dated 28.12.2018 under Section 156 of the Income Tax Act, 1961 (‘Act’ for short).
2. The petitioner is a company engaged in the business of development of immovable properties, formation of layouts, sale of the sites/plots thereof. The petitioner was subjected to assessment under Section 143(3) of the Act relating to the assessment year 2016-17. Before passing of the assessment order on 28.12.2018, an order dated 27.12.2018 was passed under Section 281B of the Act attaching the properties belonging to the assessee in order to protect the interest of the revenue during the assessment proceedings.
3. It is the main grievance of the petitioner that the order under Section 281B of the Act is a non-speaking order and the same is void ab initio. As regards the assessment order passed under Section 143(3) of the Act, the learned counsel for the petitioner would point out that the details of the development expenses and other direct expenses were furnished with the addresses and the PAN numbers of the persons to whom the payments were made. Ignoring the same, the Assessing Officer has observed that no addresses and PAN numbers have been furnished by the assessee except the names in support of the development expenses and direct expenses. The same discloses the non-application of mind by the Assessing Officer. It is contended that immediately after passing of the order under Section 281B of the Act on 27.12.2018, the next day i.e., on 28.12.2018 the assessment order has been passed. Thus, it is contended that the orders impugned herein being violative of the fundamental principles of law deserve to be set aside..
4. The learned counsel appearing for the revenue would submit that the factual aspects now pointed out by the learned counsel for the petitioner inasmuch as the list with addresses and PAN numbers with names found in the compromise account prima-facie does not tally and this aspect requires to be considered by the appellate authority. Hence, the petitioner may be relegated to the appellate forum. It is further submitted that the order passed under Section 281B of the Act has a short span of life of six months and pursuant to the conclusion of the assessment proceedings, extension of the said order is ordinarily not contemplated. Hence, the challenge made to the said order does not survive for consideration.
5. Having heard the learned counsel appearing for the parties and perusing the material on record, this Court is of the considered opinion that there is some force in the arguments advanced by the learned counsel for the revenue as the assessment order is challenged on the factual aspects in as much as the details of names and PAN numbers said to have been furnished by the assessee to whom the payments are made to establish the claim made, the same necessarily requires to be examined by the appellate authority, the machinery provided under the Act. The question of facts cannot be examined under the writ jurisdiction.
6. Hence, the petitioner is relegated to the Appellate Forum to assail the assessment order impugned. If such an appeal is preferred within a period of three weeks from today, the same shall be considered by the Appellate Authority in accordance with law on merits without objecting to the aspect of limitation.
7. The order passed by the Assessing Officer under Section 281B of the Act has been ceased to have effect after the expiry of six months from the date of the order of the assessment. Hence, the apprehension of the petitioner regarding the enforcement of the provisional attachment further would not arise and the same can be allayed with a direction to the respondent-authorities that the said order shall not be enforced until a decision is to be taken by the Appellate Authority on the stay application, if to be filed in the appeal proceedings by the assessee within a period of three weeks as aforesaid and is ordered accordingly.
With the aforesaid observations and directions, the writ petition stands disposed of.