Provisional attachment of bank funds under income-tax law can extend to deposits, and criminal-court security may not suffice.

Section 281B of the Income-tax Act, 1961 is described as broad enough to cover money in a bank account, because "any property" includes bank deposits and the provision aims to protect the revenue from likely defeat. Security furnished in related criminal proceedings was treated as insufficient for the tax department's claim, since it secured only interim custody arrangements and not the assessed tax liability. The note also states that the challenge based on alleged inadequacy of approval or recorded satisfaction was not entertained at that stage where assessment had been completed and an appeal was pending. The stated result was that the provisional attachment was upheld.

---

---

Issues: (i) Whether money lying in a bank account is 'property' liable to provisional attachment under Section 281B of the Income-tax Act, 1961; (ii) whether the security furnished before the Magistrate's Court in the criminal proceedings could be treated as sufficient security for the revenue's claim under the Act; and (iii) whether the provisional attachment could be interfered with on the ground that the approval and satisfaction recorded by the authorities were inadequate.

Issue (i): Whether money lying in a bank account is 'property' liable to provisional attachment under Section 281B of the Income-tax Act, 1961.

Analysis: The expression 'any property' in Section 281B is of wide amplitude and is not confined to immovable property. The provision permits provisional attachment of property belonging to the assessee to protect the interests of the revenue. The reference to attachment of property in the Second Schedule and the Code of Civil Procedure, 1908 supports the inclusion of money as attachable property. Bank deposits are a form of property and there is no warrant to exclude them merely because the provision does not expressly mention bank accounts.

Conclusion: Money in a bank account is property liable to provisional attachment under Section 281B of the Income-tax Act, 1961.

Issue (ii): Whether the security furnished before the Magistrate's Court in the criminal proceedings could be treated as sufficient security for the revenue's claim under the Act.

Analysis: The security furnished before the criminal court was only to secure compliance with the interim custody arrangement in those proceedings. It did not secure the tax demand arising in assessment proceedings under the Income-tax Act, 1961. The power under Section 226(4) operates in a different context and does not make interim criminal-court security a substitute for protection of a likely tax demand. The later stage of criminal custody and possible rival claims to the property also prevent such security from being treated as adequate protection for the revenue.

Conclusion: The security furnished before the Magistrate's Court was not sufficient security for the revenue's claim.

Issue (iii): Whether the provisional attachment could be interfered with on the ground that the approval and satisfaction recorded by the authorities were inadequate.

Analysis: Provisional attachment under Section 281B requires satisfaction based on material showing that the likely demand may be defeated and that attachment is necessary to protect the revenue. Where assessment proceedings have already been completed and an appeal is pending, the challenge to the sufficiency of the earlier satisfaction loses practical significance. In the circumstances, the Court declined to go into the adequacy of the recorded satisfaction at that stage.

Conclusion: No interference was called for on the ground of alleged inadequacy of approval or satisfaction.

Final Conclusion: The appeals succeeded, the order quashing the provisional attachment was set aside, and the writ petitions failed.

Ratio Decidendi: The phrase 'any property' in Section 281B of the Income-tax Act, 1961 includes money in bank accounts, and provisional attachment may extend to such funds so long as the exercise remains aimed at protecting the revenue and is commensurate with the probable demand.

---