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January 2015

Recovery of tax – Provisional attachment – Section 281B – A. Ys. 2010-11 to 2013-14 – For valid provisional attachment notice to pay arrears is mandatory-

By K. B. Bhujle Advocate
Reading Time 2 mins
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T. Senthil Kumar vs. CIT: 369 ITR 101 (Mad):

Allowing
the assessee’s writ petition challenging the orders of provisional
attachment u/s. 281B of the Incometax Act, 1961, the Madras High Court
held as under:

“i) A combined reading of the provisions of law
would show that even to make a provisional attachment of the property of
the assessee, there should be a notice to pay the arrears as per rule
51 of the Second Schedule, Part III of the Income-tax Act. Without any
notice to the assessee, the provisional attachment cannot be made u/s.
281B of the Act. In the instant case this court finds that without
notice of demand to pay arrears, the respondent has passed an order for
provisional attachment in arbitrary manner.

iii) This court is
of the considered view that in the absence of any notice of demand or
notice u/s. 156 of the Act, the petitioner cannot be termed as “assessee
in default” or “assessee deemed to be in default”. Similarly, in the
absence of any notice to pay the arrears of tax as per rule 51 of Second
Schedule, Part III, of the Act, there cannot be any provisional
attachment u/s. 281B of the Act. Hence the impugned orders are liable to
the quashed.”

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