Rent enhancement of properties attached u/s 226(3)

[Himanshu Narayan]

The Income Tax authorities, Patna have applied before the Rent Controller cum Sub Divisional Magistrate, Sadar, Patna for effecting enhancement in the rental structure at the prevailing current rent for premises that were attached under 226(3) of IT Act.

Please inform if IT can apply for rent fixation at the current rates for properties attached u/s 226(3) whose long term tenancy is still continuing.

In this matter no notice etc. has been given by the IT to tenants whose rentals are attached u/s 226(3) and what they have received is a Notice from the Rent Controller Office, Patna Sadar, Patna.

I personally do not feel that property can be attached u/s 226(3) rather this section authorises AO/TRO to direct any person in writing from whom money is due or may become due to the assesse upto an amount which an assesse is liable to pay. This section does not authorise AO to ask for something which is not due to the assesse. To my mind, he cannot ask for revision of rent, if not originally agreed by such person.

AI Summary

Attachment under section 226(3): tax authorities sought rent enhancement, but attachment power may not permit unilateral rent revision.
Whether an income tax authority may obtain enhancement of rent for premises attached under section 226(3) while a long term tenancy subsists is disputed: the tax authority sought rent fixation at current rates without notifying tenants, and a commentator argues the provision permits directing payment of sums due to the assessee but does not permit unilaterally revising or demanding rent not originally agreed.