Case Law Details
Alok Kistuchand Agarwal Vs Sub Registrar (Gujarat High Court)
The short point that falls for our consideration which otherwise no longer res integra is whether the bank will have the precedence over the secured assets or the Income Tax Department will have the precedence over the secured assets.
Supreme Court in a recent pronouncement in the case of Punjab National Bank Vs. Union of India and Others, Civil Appeal No.2196 of 2012 decided on 24.02.2022 has taken the view that once any immovable property is mortgaged / hypothecated towards secured creditors then having regard to the provisons contained in Section 2(zc) to (zf) of the SARFAESI Act, 2002 read with the provisions contained in Section 13 of the SARFAESI Act, 2002, the secured creditor will have the first charge on the secured assets. The Supreme Court proceeded to hold that Section 35 of the SARFAESI Act, 2002 inter alia provides that the provisions of the SARFAESI Act shall have overriding effect on all other laws.
In the case on hand, the Income Tax Department obviously would rely upon the provisions of Section 281 of the Income Tax Act.
In view of the recent pronouncement, the provisions contained in Section 281 of the Income Tax Act would be said subject to the provisions contained in the SARFAESI Act, 2002. It appears that the Company was assessed for the F.Y. 2007-08. We do not have the exact date on which the assessment order came to be passed, but the records reveals that the Income Tax Department proceeded to attach the plots some time in 2013.
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