The Madras High Court stayed the Attachment Order, prohibiting withdrawal of Fixed Deposits as Income Tax Dept. not given a reasonable opportunity to submit a counter-affidavit.
The writ petitions are still pending and the request made by the Revenue for granting time for filing counter affidavit was acceded to by the learned Single Bench and the matter was directed to be listed on 02.06.2021. The orders which are impugned in the writ petitions are orders of attachment of properties under Section 132(9B) of the Income Tax Act, 1961. The interim order enures in favour of the two writ petitioners, who have filed three writ petitions. The Single Bench, on perusal of the records which were called for from the Department, has recorded a finding that the provisional attachment of the property envisaged under Section 132(9B) is of property ‘belonging to the assessee’ and that the two writ petitioners have not been subjected to search and seizure under Section 132 of the Act, and therefore, held that there is no justification for provisional attachment of their assets.
The Additional Solicitor General submitted that the appellant-Revenue was not granted reasonable opportunity to put forth the facts in the form of counter affidavit, and to support such a submission, the learned counsel has referred to the order passed by the learned Single Bench. It is submitted that, on the said date, the Standing Counsel for the Revenue accepted notice and sought time to obtain instructions and file counter. Though such was the request made by the Department, the Court directed the production of records, as it was inclined to peruse the records. Therefore, the case was directed to be listed on 08.04.2021 immediately after admission. Counter/written instructions were to be filed by the Department by then with advance copies served on the counsel for the respondents/writ petitioners.
The division bench of Justice T.S.Sivangananam and Justice Sathi Kumar Sukumara Kurup said that the order lifting the attachment forthwith would amount to allowing the writ petition itself, as what was impugned in the writ petition is the order of attachment under Section 132(9B) of the Act. If the order of attachment is lifted, then the respondent/assessee would get the entire relief as prayed for in the main writ petition. The prayer for interim stay of the order of attachment, if granted before filing the counter and before adjudicating the issues, would result in granting the main relief at the interim stage itself, which is normally
not granted unless and until the pleadings are complete and the arguments are heard on the prayer for interim relief.
Therefore, the court directed that those Fixed Deposits, which are 9 in number, shall continue to remain in the Indian Bank and the respondents/writ petitioners are prohibited from withdrawing the said amount or liquidating the Fixed Deposits, and the Indian Bank, Thousand Lights Branch, shall await the orders to be passed in the main writ petitions.
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