| Question And Answer | |
|---|---|
| Subject: | Whether the provisional Attachment under section 281B of Income- tax Act after completion of assessment ? |
| Category: | Income-Tax |
| Querist: | Arpit |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | attachment of Bank Account, Provisional attachment of bank Account |
| Date: | May 16, 2021 |
Sir, the IT deppt. had sent to the bank attachment notice of an assessee on february 2020. The assessee’s appeal is pending and he has not paid 20% of the demand. He has filed for saty of demand but no reply has been submitted. In the mean time,6 months have elapsed and no extention letter has been sent to the bank for attachment. Can the bank account be released based on expiry of 6 months?
From our understanding of the question,
The provisional attachment under section 281B of the Income-tax Act, 1961 can only operate during the assessment proceedings. In the given case, assessment is complete and the assessee is in appeal. Therefore, provisional attachment cannot operate in the given factual matrix.
Reliance is placed on the decision of the Hon’ble Delhi High Court in the case of Dabur Invest Corp. v. ACIT [2019] 416 ITR 282 (Delhi) wherein it was held that Once assessment is complete, provisional attachment under section 281B of the Act cannot continue.
Note:
In Motorola Solutions India (P.) Ltd. v. CIT (2013) 212 Taxman 35 / 87 DTR 369 / 263 CTR 215 (P&H)(HC) the Court held that provisional attachment order passed under section 281B and notices/letters issued to bank and sundry debtors of petitioner not to make payment to petitioner would cease to operate after passing of assessment order. Hence, the validity period of six months of provisional attachment order would be extinguished after passing of assessment order.
Dr. K. Shivaram Senior Advocate