JSR Infra Projects Pvt. Ltd. Vs Tax Recovery Officer (Madras High Court)
Conclusion: Once the order of ITAT had attained finality on factual aspects and assessee had discharged the entire liability, the Tax Recovery Officer was bound, under Section 225(2) to lift the attachment on property.
Held: In the instant case, pursuant to a search conducted on 08.12.2016, assessment orders were passed under Section 153A for AYs 2011–12 to 2017–18, wherein additions were made for AYs 2015–16 to 2017–18. CIT(A) partly allowed the appeal by deleting the additions, which was confirmed by ITAT. Similarly, for AY 2016–17, assessment under Section 153C was annulled by CIT(A) and affirmed by ITAT. Despite such appellate relief, the Department failed to lift the attachment order dated 15.07.2022. Assessee stated that all dues mentioned in the counter had already been paid, as shown in the statement dated 28.08.2025, and hence no amount was outstanding. It was argued that once the ITAT’s order attained finality on facts, the Department was bound to lift the attachment. Reliance was placed on Sri Lakshmi Brick Industries vs. Tax Recovery Officer and Coromandel Oils Pvt. Ltd. vs. Tax Recovery Officer, where the Madras High Court had held that once factual issues attained finality and dues were paid, the attachment must be lifted. Department however, submitted that the issue had not reached finality, as an appeal before the High Court was in process, though not yet numbered, but accepted the legal position stated in the cited judgments. It was held that once the order of ITAT—the highest fact-finding authority—had attained finality on factual aspects and assessee had discharged the entire liability, the Tax Recovery Officer was bound, under Section 225(2) of the Income Tax Act, to lift the attachment. The pendency of any departmental appeal before the High Court on a question of law did not justify continuation of attachment. Tax Recovery Officer to release the attached property covered under the order dated 15.07.2022 within four weeks from the date of receipt of the order.
