Attachment under the Second Schedule cannot survive full discharge of the certificate debt or extend to later penalty liability.

An attachment under Rule 48 of the Second Schedule to the Income-tax Act, 1961 is confined to the specific recovery demand for which it is issued, including interest under section 220(2), and cannot continue after that demand is fully discharged. A later penalty order arising after the attachment does not enlarge or extend the earlier attachment to cover a new liability. Once the entire amount covered by the recovery certificate was paid before any auction or sale, the declaration treating the jointly owned property sale as null and void could not be sustained and was liable to be quashed.

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Issues: Whether the order declaring the sale deed and transfer of the jointly owned property as null and void under Rule 16 of the Second Schedule to the Income-tax Act, 1961 could survive after the entire amount due under the recovery certificate with interest had been paid, and whether the earlier attachment could be continued for a later penalty demand.

Analysis: The property was jointly owned, and the attachment under Rule 48 of the Second Schedule was issued only for the dues covered by the recovery certificate dated 16/12/2004 and interest under section 220(2) of the Income-tax Act, 1961. The entire amount covered by that certificate was subsequently paid, leaving no outstanding amount under the very certificate for which the attachment had been made. The later penalty order dated 17/3/2006 came into existence after the attachment and could not enlarge or extend the earlier attachment, which was confined to the certificate debt. Rule 60 of the Second Schedule, which permits setting aside a sale on deposit, also supported the view that once the underlying demand was discharged before any auction or sale, continuation of the impugned declaration was unjustified.

Conclusion: The impugned order declaring the sale transaction null and void could not be sustained and was liable to be quashed; the contention that the earlier attachment continued for the later penalty demand was rejected.

Ratio Decidendi: An attachment under Rule 48 of the Second Schedule to the Income-tax Act, 1961 is confined to the demand for which it is issued and cannot survive once that demand is fully discharged, nor can it be extended to a subsequent penalty liability that arose later.

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