Raghunandan Enterprise Vs ACIT (Gujarat High Court)
The plain reading of Section-281B of the Act would make it clear that the same provides for the provisional attachment of the property belonging to the assessee for a period of six months from the date of such attachment unless extended, but excluding the period of stay of the assessment proceedings, if any. Under Subsection (1) of Section 281B of the Act thus, where during the pendency of any proceedings for assessment or reassessment, if the Assessing Officer is of the opinion that for the purposes of protecting the interest of Revenue, it is necessary so to do, he may with the previous approval of the higher authority pass an order in writing provisionally attaching the property belonging to the assessee. These are drastic powers permitting the Assessing Officer to attach any property of an assessee even before the completion of assessment or reassessment. These powers are thus in the nature of attachment before judgment. They have provisional applicability and in terms of sub-section (2) of section 281B of the Act, a limited life. Such powers must, therefore, be exercised in appropriate cases for proper reasons. Such powers cannot be exercised merely by repeating the phraseology used in the section and recording the opinion of the officer passing such order that he was satisfied for the purpose of protecting the interest of Revenue, it was necessary so to do.
The assessee in the case on hand is Arnav Savaliya. The provisional attachment is of the property, which belongs to the writ-applicant – Partnership Firm. The plain language of the provision of Section-281B is plain and simple. It provides for the attachment of the property of the assessee only and of no one-else. The golden rule of interpretation of the statutes is that the statute has to be construed according to its plain, literal and grammatical meaning, unless it leads to absurdity. The subject land i.e. Block No.142 not being the property of the assessee as such, was not open to provisional attachment. Even if we go by the case of the revenue that there is some interest of Savaliya involved in the land in question, the same will not make the subject land of the ownership of the assessee i.e. Arnav Savaliya.
We once-again remind ourselves of the fine distinction drawn by the Supreme Court in the case of Sunil J. Kinariwala (Supra) between a case where a partner of a firm assigns his/her share in favour of a third person and a case where a partner constitutes a sub-partnership with his/her share in the main partnership. The case on hand indisputably is not one of a sub-partnership though in view of Section-29(1) of the Partnership Act, Arnav Savaliya as an assignee may become entitled to receive the assigned share in the profits from the writ-applicant – Firm, not as a sub-partner because no sub-partnership came into existence, but as an assignee to the share of profit of the assigner-partner viz. Nitaben Shaileshbhai Radadiya.
In the overall view of the matter, we are convinced that the provisional attachment of the subject land under Section-281B of the Act at the instance of the revenue is not sustainable in law.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. By this writ-application under Article 226 of the Constitution of India, the writ-applicant – a Partnership Firm and assessee has prayed for the following reliefs:-
7(A) Quash and set aside the impugned order dated 29.05.2021 at Annexure-‘A’ to this petition so far as attachment over in respect fo land admeasuring 11981 sq.mtr. Land situated at Block No.142, New Block No.166, T.P. 22, F.P.53, Village Valak, Taluka Kamrej, District Surat;
(B) Quash and set aside the amendment. Record made in the Village Form Number 7 at Annexure ‘B’ in relation to land admeasuring 11981 sq.mtr. Land situated at Block No.142, New Block No.166, T.P. 22, F.P.53, Village Valak, Taluka Kamrej, District Surat consequence to the order at Annexure- ‘A’ dated 29.05.2021.
(C) Pending the admission, hearing and final disposal of this petition, to stay operation of the order at Annexure – ‘A’ to this petition to the limited extent to attachment over land admeasuring 11981 sq.mtr. Land situtated at Block No.142, New Block No.166, T.P. 22, F.P.53, Village Valak, Taluka Kamrej, District Surat as well as to stay the operation of amendment in Village Form Number 7 dated 29.05.2021 (Annexure B);
(D) Any other and further relief deemed just and proper be granted in the interest of justice;
(E) To provide for the cost of this petition.
2. The facts giving rise to this writ-application may be summarized as under:-
2.1 The writ-applicant is a Partnership Firm. It came to be constituted on 20.11.2014 and got duly registered with the Registrar of Firms on 26.11.2014.
2.2 It appears from the materials on record that a search and seizure was undertaken under Section-132 of the Act at the premises of one Arnav Mukeshbhai Savaliya (searched person). In the course of the search, many documents were seized. One statement also came to be recorded of Mr. Savaliya. Savaliya in his statement said something about a parcel of land bearing Block No.142, New Block No.166, T.P.-22, F.P.-53, admeasuring 11981 sq.mtrs. situated at the Village Valak, Taluka Kamrej, District Surat. The statement of Mr. Savaliya if to be understood correctly is that with respect to the Block No.142, his son Arnav Savaliya paid Rs.1,50,00,000/- [Rupees One Crore Fifty Lakh Only] in cash to Nitaben Shaileshbhai Radadiya one of the Partners of the writ-applicant – Partnership Firm and thereby, got 2.5% share in the profit assigned in his favour.
2.3 The Department thought fit to pass an order of provisional attachment of various properties of Arnav Savaliya under Section-281B of the Act.
2.4 The impugned order of provisional attachment reads thus:-
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
INCOME TAX DEPARTMENT
OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE 4, SURAT
To,
ARNAV MUKESHBHAI SAVALIYA
95, Mahendra Park Society,
B/s. Suzuki Showroom,
Puna Kumbhariya Road,
Surat, Surat 395010, Gujarat
India.
