High Court declares illegal attachment of bank accounts & properties under Income Tax Act, allows operations, directs expedited appeals.

The High Court declared the notices issued under Section 226(3) of the Income Tax Act, 1961, attaching bank accounts and properties as illegal and void. The Court directed the withdrawal of attachments, allowing the petitioner to operate bank accounts and release properties. The Tribunal was instructed to expedite the hearing of appeals within six months. The petitioner was ordered to deposit 20% of tax dues to lift attachments, with conditions on future deposits. The judgment concluded by disposing of the Writ Petition and related applications, without costs awarded.

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Issues:
1. Legality of notices issued under Section 226(3) of the Income Tax Act, 1961.
2. Validity of the notice dated 18.03.2014 by Tax Recovery Officer.
3. Direction to allow the petitioner to operate bank accounts and release attached properties.
4. Assessment orders passed against the petitioner for various demands.
5. Appeals filed by the petitioner and the revenue before different authorities.
6. Stay application filed by the petitioner and non-compliance with the order.
7. Consideration of attachment of bank accounts and properties.
8. Provisions of Section 254(2A) of the Income Tax Act.
9. Impact of attachment on petitioner's business activities and revenue generation.

Analysis:
1. The Writ Petition challenges the legality of notices issued under Section 226(3) of the Income Tax Act, 1961, dated 12.12.2019, attaching nine bank accounts of the petitioner. The petitioner seeks a declaration that these actions are illegal and void, along with a similar challenge against a notice dated 18.03.2014 attaching properties, including stock in trade. The High Court considers the drastic nature of such attachments and emphasizes the need for expeditious resolution through the Tribunal.

2. The judgment outlines the background of a search and seizure action against a company, leading to assessments against the petitioner for various demands. Despite appeals and revisions, outstanding dues remain. The Tribunal is directed to hear the appeals and cross-objections within six months. The Court also highlights the provision of Section 254(2A) of the Act, allowing for a stay subject to certain conditions.

3. The petitioner's inability to generate revenue due to the attachment of properties, affecting business activities, is considered. In a balanced approach, the Court orders the withdrawal of the attachment of stock-in-trade to enable the petitioner to meet tax dues as per the provisions of Section 254(2A). The judgment further directs the withdrawal of bank account attachments, considering the limited recovery through such means.

4. The Court orders the petitioner to deposit 20% of the tax dues following the first appellate authority's order. Upon such deposit, the attachments on bank accounts and stock-in-trade are to be withdrawn immediately. Additionally, a condition is imposed on future deposits into bank accounts to ensure a portion is maintained until necessary. The judgment concludes by disposing of the Writ Petition and related applications, with no costs awarded.

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