TaxTMI 
TaxTMI 
2015 (2) TMI 726
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..... For the execution of the said project, loans were raised by the petitioner from the banking agencies like Can Fin Homes Ltd., Axis Bank and prospective buyers, apart from obtaining periodical credits from the supplier of building and other materials necessary for construction. Out of the 25 flats, 18 flats have been constructed and sold and remaining 7 flats are yet to be sold. As per the "project completion method", a recognised accounting method, the profit from the said project can accrue or arise or be ascertained only after completion of the entire project. (b) While so, on October 23, 2013, and October 24, 2013, survey oper ations were conducted under section 133A of the Income-tax Act with the primary object of collecting information. In the process of survey, books of account and documents were retained by the Income-tax Department. The petitioner has filed regularly his Income-tax returns for the assessment years 2010-11 to 2013-14, and the particulars of the same are as follows : 2010-11 11-5-2011 Rs. 5,70,655 Rs. 77,690 (Advance tax Rs. 75,000) 2011-12 14-11-2011 Rs. ....
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....very of new evidence, survey and search, it should be reopened under section 147 of the Income-tax Act. A survey was conducted for two days on October 23, 2013, and October 24, 2013. Sufficient opportunity was given to the petitioner-assessee to make his submissions to the Commissioner of Income-tax-I, Trichy, and the Joint Commissioner of Income-tax, Range-II, Trichy, in their presence and in the presence of two witnesses and other Income-tax Department officials. The petitioner had enough time to explain the sources for the purchase of land measuring about 15698 sq. ft in the year 2011 and the source of fund utilised for the construction of 25 flats. The provisional attachment of property can be made under section 281B of the Income-tax Act during the pendency of any proceedings for the assessment or reassessment of income, which has escaped assessment. In the instant case, a notice under section 148 of the Act was issued on October 24, 2013, which is a primary stage to commence Income-tax proceedings and the Assessing Officer (second respondent) is of the opinion that for the purpose of protecting the interests of the Revenue, it is necessary to attach any property under section....
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....used the materials available on record. 8. According to the learned senior counsel appearing for the petitioner, before passing the order of attachment, there must be a tax demand and if such tax demand is not made within the prescribed time, a reference to the Tax Recovery Officer (TRO) under section 222 of the Act has to be made. The Tax Recovery Officer may draw up a certificate specifying the amount of arrears due from the assessee and a finding has to be recorded to term the assessee as "assessee in default" or "assessee deemed to be in default". In the absence of any of the abovesaid pre-requisites to the recovery proceedings, the provisional order of attachment is invalid in law. 9. In the instant case, this court finds that, as contended by the learned senior counsel for the petitioner, no such a certificate was issued by the Tax Recovery Officer. In the absence of such certificate, the petitioner cannot be construed as "assessee in default". Similarly, the petitioner will also not come within the meaning of "assessee deemed to be in default" for the reason that to bring a person within the meaning of "assessee deemed to be in default" there should be a notice of demand u....
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....use genuine hardship to the assessee ; (ii) default in the payment of the amount on which interest has been paid or was payable under the said sub-section was due to circumstances beyond the control of the assessee ; and (iii) the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him. (3) Without prejudice to the provisions contained in sub-section (2) on an application made by the assessee before the expiry of the due date under sub-section (1), the Assessing Officer may extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case. (4) If the amount is not paid within the time limited under sub- section (1) or extended under sub-section (3), as the case may be, at the place and to the person mentioned in the said notice the assessee shall be deemed to be in default." A reading of the above said provision would show that to bring an assessee under the definition of "assessee deemed to be in default", there should be a demand notice under section 156 of the Act and if the said demand is not paid within the time fram....
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....such further period or periods as he thinks fit, so, however, that the total period of extension shall not in any case exceed two years : Provided further that where an application for settlement under section 245C is made, the period commencing from the date on which such application is made and ending with the date on which an order under sub-section (1) of section 245D is made shall be excluded from the period specified in the preceding proviso." The Second Schedule, Part I, rule 1 : "In this Schedule, unless the context otherwise requires- (a) 'certificate', except in rules 7, 44, 65 and sub-rule (2) of the rule 66 means the certificate drawn up by the Tax Recovery Officer under section 222 in respect of any assessee referred to in that section ; (b) 'defaulter' means the assessee mentioned in the certificate ; The second Schedule, Part III, rule 51 reads as follows : "Attachment to relate back from the date of service of notice.- Where any immovable property is attached under this Schedule, the attachment shall relate back to, and take effect from, the date on which the notice....