ARL Infratech Limited Vs DCIT (Rajasthan High Court)
Core issue :Whether provisional attachment of property under Section 281B of the Income-tax Act, 1961 can be invoked without tangible material demonstrating likelihood of non-recovery of tax demand, particularly when the assessee has a history of being a regular taxpayer.
Facts of the Case
1. The assessee company was engaged in manufacturing building materials such as cement sheets, cement pipes, AAC blocks, metal sheets and quartz slabs.
2. The assessee had paid income tax exceeding ₹45.43 crore for AY 2021-22 to AY 2026-27.
3. A search action under Sections 132 / 133A was conducted and assessment order was passed on 27.03.2025.
4. Only ₹4,40,120 was added during the search assessment and no demand was raised.
5. Subsequently, reassessment notices under Section 148 were issued for AY 2021-22, 2022-23 and 2024-25.
6. The Assessing Officer apprehended a potential demand of ₹1,30,11,024 and passed an order of provisional attachment under Section 281B attaching the assessee’s industrial plot.
7. The assessee challenged the attachment before the High Court contending that:
The company was a regular taxpayer.
The property attached was worth several crores, disproportionate to the alleged demand.
As per CBDT Office Memoranda dated 29.02.2016 and 31.07.2017, only 20% of disputed demand is normally required to be deposited to obtain stay.
