Case Law Details
Pooja Trading Co. Vs DCIT (Inv) & Anr. (Delhi High Court)
Introduction: In a recent ruling, the Delhi High Court addressed the legality of bank account freezing under Section 132(8-A) of the Income Tax Act. The case, Pooja Trading Co. Vs DCIT (Inv) & Anr., sheds light on the duration of such freezing orders and their enforceability.
Analysis: The petitioners challenged the freezing of their bank accounts through a letter issued by the respondents on 30.04.2023. They argued that under Section 132(8-A) of the Income Tax Act, such freezing orders are valid for a maximum of sixty days. As the sixty-day period had elapsed by 30.06.2023, the petitioners contended that the freezing of their accounts beyond this date was unjustified.
On the other hand, the respondents justified the freezing by citing a search and seizure operation conducted under Section 132(1) of the Act. They claimed that suspicious transactions necessitated the freezing to prevent revenue leakage. However, the petitioners highlighted the absence of any subsequent order extending the freezing beyond the sixty-day limit.
Upon examination, the Delhi High Court reaffirmed the statutory provision of Section 132(8-A), which limits the duration of freezing orders to sixty days. Since the freezing order in question was issued on 30.04.2023, its validity ceased by 30.06.2023. The court noted that despite extensions and ample time given for explanations, the respondents failed to justify the continued freeze beyond the statutory limit.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
