TaxTMI 
TaxTMI 
2014 (2) TMI 849
X X X X Extracts X X X X
X X X X Extracts X X X X
....; The petitioner is assessed as an individual by the Income-tax Department. On 5th August 1992, the petitioner had opened a PPF account with State Bank of India, Salabatpura Branch, Surat under the Public Provident Fund Scheme, 1968 ["the Scheme" for short]. From time to time, the petitioner went on depositing various amounts in the said account. As on 29th October 2004, there was a sum of Rs. 9,06,466.01p. accumulated in the PPF account of the petitioner. The respondent-Tax Recovery Officer, Surat issued a notice dated 25th February 2005 under section 226(3) of the Income-tax Act, 1961 ("Act" for short) to the Branch Manager of Salabatpur Branch of the State Bank of India stating that a sum of Rs. 25,16,790/= is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Civil Procedure Code to contend that the amount in the PPF account cannot be attached. On the other hand, learned counsel Shri Sudhir Mehta for the Department opposed the petition contending that Section 9 of the PPF Act only pertains to the attachment under any decree or order of the Court in respect of any debt or liability incurred by the subscriber and has no reference to his income-tax dues. He relied on CBDT circular dated 7th November 1990 in which it is clarified as under:- "It has been clarified by the C.B.D.T and the Ministry of Law that Section 9 of the Public Provident Fund applies only to attachment under a decree/order of a Court of Law and not to attachment by the Income ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of a minor, of whom he is the guardian, subscribe to the Fund in such manner and subject to such maximum and minimum limits as may be prescribed in the Scheme. Section 5 pertains to interest to be paid on such subscriptions. Section 6 pertains to withdrawals which may be permitted to the extend and subject to terms and conditions as may be specified. Section 9, which is important for us, reads as under :- "9. Protection against attachment - The amount standing to the credit of any subscriber in the Fund shall not be liable to attachment under any decree or order of any Court in respect of any debt or liability incurred by the subscriber." From the provisions of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....case of Union of India v. Radha Kissen Agarwalla & Anr., AIR 1969 SC 762, in the context of Railway Provident Fund created under the Provident Funds Act, 1925, the Apex Court observed that the Union of India was a trustee for the subscriber of the money. When the amount lying with the Reserve Bank as an agent of the Railway administration was attached, the Union had clearly an interest to maintain the application for removal of the attachment. With such observation, the order of attachment of the amount by the Railway Administration was held to be contrary to Section 3 of the PPF Act, 1925. We may refer to Section 3 (1) of the PPF Act, 1925 which provides, inter alia, that, "..A compulsory deposit in any Government or Railway Provident Fund....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Property exempt from attachment : (1) All such property as is by the Code of Civil Procedure, 1908 (5 of 1908), shall be exempt from attachment and sale in execution of a decree of a civil court shall be exempt from attachment and sale under this Schedule. (2) The Tax Recovery Officer's decision as to what property is so entitled to exemption shall be conclusive." From the said rule, it could be seen that all such property as is by the Code of Civil Procedure exempted from attachment and sale in execution of a decree of a civil court shall be exempt from attachment and sale under the said schedule also. In turn, if one peruses Section 60 of the Code of Civil Procedure, it pertains to property liable to attachment and sale in e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r attachment or sale under the Code. This brings us right back to Section 9 of the PPF Act, 1968 which provides that the amount standing to the credit of any subscriber shall not be liable to attachment under any decree or order of any Court in respect of any debt or liability incurred by the subscriber. In case of Union of India v. Smt. Hira Devi & Anr., reported in AIR 1952 SC 227, the Apex Court held and observed that the compulsory deposit made in the Provident Fund under Section 2 (1) of the Provident Fund Act, 1925 is not liable to attachment. It was observed that the prohibition against the assignment or the attachment of such compulsory deposits is based on grounds of public policy. Considering the benevolent provisions of the....