Indian Minreals And Granite Co. Vs DCIT (Karnataka High Court)
The Karnataka High Court considered a writ petition challenging provisional attachment orders issued by the Income Tax Department under Section 281B(1) of the Income Tax Act, 1961. The petitioners sought quashing of orders dated 26.03.2021 through which the department provisionally attached their fixed deposits during the course of income tax proceedings.
The case arose after a search operation was conducted against the petitioners under Section 132 of the Income Tax Act. Following the search, assessment proceedings were initiated under Section 153A. During the pendency of these proceedings, the Assessing Officer issued orders provisionally attaching the petitioners’ fixed deposits by invoking Section 281B of the Act. These attachment orders were challenged before the High Court.
The petitioners argued that the mandatory requirements for invoking provisional attachment under Section 281B had not been satisfied. They contended that the impugned orders did not record any proper reasons or satisfaction as required by law. According to the petitioners, the orders merely stated that attachment was necessary without providing valid or cogent reasons demonstrating why such attachment was required to protect the revenue. The petitioners relied on decisions of the Supreme Court in Radha Krishan Industries v. State of Himachal Pradesh and Sahara India (Firm) v. Commissioner of Income Tax to argue that the statutory requirements governing provisional attachment must be strictly followed.
