Assessee need not be intimated before attachment of his bank account

O R D E R

11.07.2017

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Dr. S. Muralidhar, J.

Question involved

1. An interesting question of law that has been raised in this writ petition by GECAS Services India Pvt. Ltd. is whether it was mandatory for the Income Tax Department (‘Department’) to have issued a notice to the Petitioner under Section 226 (3) (iii) of the Income Tax Act, 1961 (‘Act’) prior to issuing a notice dated 27^thFebruary, 2017 to the garnishee, i.e., the Branch Manager, HSBC (with which the Petitioner has an account) under Section 226 (3) (i) of the Income Tax Act, 1961 (the Act)?

Background facts

2. The background facts are that the Petitioner (hereinafter ‘Assessee’) is a wholly-owned subsidiary of the GE Group. 99.5% of the shares in the Petitioner are held by GECAS Services Ltd., Ireland and the remainder is held by GE Capital Aviation Funding, Ireland. The Petitioner is stated to be engaged in the business of providing marketing support, liaising and administrative services in connection with leasing of aircrafts in India to its parent company.

3. The Assessee filed its return of income for Assessment Year (‘AY’) 2014- 15 declaring an income of Rs. 21,37,610. The return of income was picked up for scrutiny. By an order dated 19^th December, 2016 the Income Tax Officer, Ward 11(3) [(hereinafter Assessing Officer (‘AO’)] framed the assessment under Section 143 (3) of the Act making an addition of Rs. 2,14,78,118.90 to the Assessee’s income thereby raising a tax demand of Rs. 94,51,390.

4. The Assessee states that it received a copy of the aforementioned assessment order on 24^th December, 2016. On 23^rd January, 2017, the Assessee electronically filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. According to the Assessee, the AO was electronically intimated about the filing of the appeal before the CIT (A).

5. It is stated that on 25^th March, 2017, the Assessee received a notice dated 27^th February, 2017 issued under Section 226 (3) (i) of the Act addressed to the HSBC bank attaching the Assessee’s bank account held there and any other amount held in recurring deposit/fixed account and current account held with the said bank towards the recovery of the entire tax demand of Rs. 94,51,390.

6. The Assessee states that it was shocked to learn that the AO had already recovered the entire demand of Rs. 94,51,390 on 9^th March, 2017 much before the dispatch of notice dated 27^th February, 2017 to the Assessee. A copy of the transaction statement of the debit entry in the Assessee’s bank account has been enclosed with the petition.

The present petition