Pension Account Attached for Income Tax Dues: Madras HC Allows Withdrawal Citing S.11 of TN Pension Act [Read Order]

The High Court of Madras, allowed monthly withdrawal of ₹48,000 from a pension account attached for tax recovery, citing protection under Section 11 of the Tamil Nadu Pension Act, 1871.

S.Devarajan. petitioner-assessee, filed a writ petition seeking a direction to DBS Bank, Kancheepuram Branch, to lift the attachment on his pension amount credited to his savings account.

The assessee counsel submitted that in 2021, the Department issued a notice for non-filing of returns for AY 2013–14. The petitioner then filed the return declaring income of ₹2,53,460 from pension. However, the Department treated certain transactions made by the petitioner’s wife in a joint account as unexplained income and passed an assessment order.

The petitioner filed an appeal against this order, but during its pendency, recovery proceedings were initiated and the petitioner’s bank account was attached.

It was further submitted that under Section 11 of the Tamil Nadu Pension Act, pension amounts are exempt from attachment. Despite this, the pension account was attached. Since the petitioner was a senior citizen and facing financial hardship, counsel requested permission for the petitioner to withdraw the monthly pension of ₹48,000 while allowing the attachment to continue for other amounts.

The Department counsel opposed the request, stating that the petitioner should not be allowed to withdraw any amount as the pending tax liability was high, at ₹1.07 crore.

Justice Krishnan Ramasamy considered the submissions and reviewed the records.The petitioner, a retired Deputy Manager of Lakshmi Vilas Bank, had not filed returns after retirement as his only income was pension. His wife, who was engaged in milk vending and cattle herding, made transactions through their joint account.

In 2021, the Department issued a notice for non-filing of return for AY 2013–14. The petitioner then filed his return, declaring ₹2,53,460 as pension income. However, the Department treated the joint account transactions as unexplained income and passed an assessment order. While the petitioner’s appeal was pending, his pension account was attached for recovery.

The petitioner relied on Section 11 of the Tamil Nadu Pension Act, which exempts pension from attachment. He later restricted his relief and only sought permission to withdraw his monthly pension.

Considering the pending appeal, the age of the transaction (2013), and the protection under the Pension Act, the Court allowed the petitioner to withdraw up to ₹48,000 per month from his pension account. It also permitted withdrawal of the pension amount accumulated after the date of attachment, upon verification by the bank. The attachment would otherwise continue until the appeal was decided.

The bench directed the appellate authority to dispose of the appeal filed on 07.01.2023 at the earliest and disposed of the writ petition.

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