No Justification for attachment of properties in absence of Income tax liability: Kerala HC [Read Order]

In a recent case, the Kerala High Court has observed that “Once there is no tax liability on the petitioner for which the petitioner’s properties could be attached, there is no justification for keeping the attachment on the properties.”

The petitioner Rajendran Pillai filed a writ petition urging a mandamus to lift property attachment, as the Income Tax Appellate Tribunal's order on 20.01.2023 nullified assessment orders for 2012-13 to 2018-19. The assessing authority, on remand, removed prior additions, resulting in a refund of Rs.10,77,61,574/- for the petitioner.

The bench stated that “Once there is no tax liability on the petitioner for which the petitioner’s properties could be attached, there is no justification for keeping the attachment on the properties after the fresh assessment order always had been passed and refund of Rs.10,77,61,574/- has been found to be adjusted against the existing demands.”

As per the respondent's statement, the provisional attachment on the petitioner's properties, valid for six months under Section 222(2)(b) of the Income Tax Act, 1961, last occurred on 30.12.2019. After this period, the attachment automatically ceased to exist, rendering the order void ab initio, and currently, there is no provisional attachment on the petitioner's properties.

A Single bench of Justice Dinesh Kumar noted the respondents' stance that there is no existing attachment order on the petitioner's properties, allowing the petitioner the freedom to manage their properties as they see fit. Given the respondents' explicit position in their statement, there is no basis for further proceedings in this writ petition. It was made clear that there is no attachment on the properties of the petitioner and consequently, disposed of the writ petition.

To Read the full text of the Order CLICK HERE

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