Protective attachment under income-tax law stood, but rent collection from attached property required prior authority.
A protective attachment of immovable property under the Income-tax Act could not be questioned at that stage, so the challenge to the attachment failed and the attachment remained undisturbed. However, the Department had no independent authority to collect rent from the attached property merely because it was under attachment; rent collection could arise only after the competent authority first determined that the investment source was the petitioner's sister and that the property belonged to her. The writ petition succeeded only to restrain rent collection, while the attachment itself was upheld.
Issues: (i) whether the protective attachment of the petitioner's immovable property could be questioned; and (ii) whether the Income-tax Department could collect rent from the attached property without an express authority.
Issue (i): whether the protective attachment of the petitioner's immovable property could be questioned.
Analysis: The attachment was made in the nature of a protective measure under the Income-tax Act. In that situation, the challenge to the attachment itself was not sustainable at that stage.
Conclusion: The attachment of the property was upheld and the challenge to it failed.
Issue (ii): whether the Income-tax Department could collect rent from the attached property without an express authority.
Analysis: The Department had no independent authority to collect rent from the property merely because it stood under attachment. Such collection could arise only if the competent authority first determined that the source of investment was made by the petitioner's sister and that the property belonged to her.
Conclusion: The Department was held not entitled to collect rent from the property without such authority.
Final Conclusion: The writ petition succeeded only to the extent of restraining rent collection, while the protective attachment itself remained undisturbed.
TaxTMI 
AI Drafter ✕
TaxTMI 
