PPF Deposit Account immune from attachment for recovery of tax dues

CA Sandeep Kanoi

Hon’ble Gujarat HC has held in the case of  Dineshchandra Bhailalbhai Gandhi VS. TRO has held that  deposits in PPF Account are immune from attachment for recovery of tax dues and  Rule 10 of Schedule II of the I-T Act exempts all such properties from attachment or sale.

Brief facts of the Case

The respondent­ Tax Recovery Officer, Surat issued a notice dated 25^th February 2005 under section 226(3) of the Income­ tax Act, 1961  to the Branch Manager of Salabatpur Branch of the State Bank of India stating that a sum of Rs. 25,16,790/= is due from the petitioner to the Income ­tax Department. His PPF account is therefore attached under section 226 (3) of the Act and the amount lying in the said account may be remitted to the Tax Recovery Officer.

Contention of the Assessee

Petitioner placed heavy reliance on Section 9 of the Public Provident Fund Act, 1968 to contend that the amount outstanding in the petitioner’s PPF account cannot be attached for recovery of his tax dues. He also relied on Rule 10 of Schedule ­II to the Income tax Act, 1961 in this respect. Our attention was drawn to Section 60 of the Civil Procedure Code to contend that the amount in the PPF account cannot be attached.

Contention of the Revenue