2021 (9) TMI 1142 - HC - Income Tax

Provisional attachment order quashed post assessment. Petitioner's right to access info upheld. Compliance directive with penalty.

Edelweiss Asset Reconstruction Company Limited Versus Deputy Commissioner Of Income – Tax, Principal Chief Commissioner Of Income – Tax, The Director General Of Income Tax (Inv.), Central Registry Of Securitisation Asset Reconstruction And Security Insterest Of India (Cersai), Central Depository Services (India) Limited (Cdsl) Registered Office At Marathon Futurex

The court ruled that the provisional attachment order became irrelevant after the assessment order, thus quashing it was unnecessary. The petitioner's ... Attachment orders - direction for furnishing copies of the documents that were considered for issuing the attachment order - HELD THAT- This court grants a limited indulgence in the matter as under and for the following reasons:- (a) It is the specific case of the Revenue that the impugned order of attachment being provisional in nature, has spent itself with the passing of the assessment order; that being the position, the question of quashing would not arise; the vehement submission of learned counsel for the petitioner that the Tax Recovery Officer has also clamped similar attachment under the provisions of II schedule to the Income Tax Act, 1961, need not be considered in this case since it constitutes an independent cause of action for which a separate challenge may be laid in accordance with law. (b) Petitioner has sought for certain information/documents from the hands of answering respondents; the contention of the Revenue that petitioner being a third person cannot be furnished with the same, is bit difficult to countenance; statutory scheme provides for grant of information subject to privacy issue, cannot be disputed; the person who seeks information/documents has to make the application in the prescribed form and pay the requisite fee therefor; if the petitioner makes such an application, the same needs to be considered in a time bound way; since the Revenue has taken a prima facie contention that petitioner being a third person, cannot be given the said information, because of “privacy issues of the assessee”, it needs to be made clear that petitioner who is holding pledge of the shares in question shall not be treated as a third person. Issues:1. Direction for furnishing copies of documents considered for issuing attachment order2. Quashing of attachment order and removal of encumbrances on shares pledgedAnalysis:The petitioner approached the writ court seeking two prayers: firstly, a direction to furnish copies of documents considered for the attachment order dated 6.8.2019, and secondly, quashing of the said attachment order along with removal of encumbrances on shares pledged to the petitioner. The respondents, represented by their panel counsel, argued that the provisional nature of the attachment order rendered the question of quashing irrelevant post the passing of the assessment order. They also contended that providing copies of documents might infringe upon the privacy of another person/assessee. The court, after hearing both parties and examining the petition papers, provided a nuanced ruling.Regarding the first issue, the court noted that since the attachment order was provisional and had ceased to have effect after the assessment order, the question of quashing the attachment did not arise. The petitioner's assertion of a similar attachment by the Tax Recovery Officer under the Income Tax Act was deemed a separate cause of action warranting a distinct challenge. On the second issue, the court acknowledged the petitioner's right to seek information and documents from the respondents. While the Revenue contended that the petitioner, as a third party, could not be provided with such information due to privacy concerns, the court found this argument challenging. It emphasized that the statutory framework allowed for the provision of information, subject to privacy considerations. The court directed the petitioner to submit an application in the prescribed form with the requisite fee to access the requested information within a specified time frame.In conclusion, the writ petition was disposed of with a directive for compliance within thirty days from the date of the petitioner's application submission. The respondents were ordered to pay a penalty of &8377;2,500 each per day for any delays in processing the petitioner's application. The judgment underscored the importance of balancing the right to information with privacy considerations, ensuring a fair and timely resolution of the petitioner's requests.