Bank account attachment under the Income-tax Act was released on a 20% demand deposit, with liberty to pursue stay relief.

Bank account attachment under Section 226(3) of the Income-tax Act was addressed by directing de-attachment of the attached accounts on deposit of 20% of the demand, enabling the assessee to make the payment. The assessee was also given liberty to approach the CIT within one week for consideration of the remaining demand, with all contentions kept open. The operative effect was partial relief through immediate release of the bank accounts subject to the stated deposit condition and preservation of the statutory remedy.

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Issues: Whether the bank account attachment under Section 226(3) of the Income-tax Act, 1961 should be released on deposit of 20% of the demand, and whether the petitioner should be permitted to approach the CIT against the order rejecting stay.

Analysis: The petition assailed the attachment of thirteen bank accounts following rejection of the stay request. The Authority accepted the respondent's stand that on deposit of 20% of the demand the accounts would be de-attached, and directed immediate release of the accounts to enable such deposit. The petitioner was also given liberty to approach the CIT within one week for consideration of the remaining demand, with all contentions left open.

Outcome: Partial relief was granted to the assessee by directing release of the attached bank accounts on deposit of 20% of the demand and by reserving liberty to pursue the statutory remedy before the CIT.

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