TaxTMI 
TaxTMI 
2006 (7) TMI 132
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....or in the form of term deposit. Admittedly, the petitioners have deposited the amount in term deposit, which is classified as account B under the Scheme. In the month of October, 2005, the petitioners made a request to the first respondent-bank to transfer the funds from their term deposit by opening a savings account, which is classified as account A. However, the first respondent-bank insisted that the petitioners should get approval of the concerned Assessing Officer for such transfer of funds from one account to another. A letter dated February 1, 2006, was addressed by the first respondent-bank to the said effect, requesting the petitioners to submit clearance from the concerned Assessing Officer in Form No. G. Aggrieved by the said ac....
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....sitor to keep the deposit as cumulative or non-cumulative deposit. Except as provided under paragraph 7 and paragraph 9, withdrawals under this account can be made only after the expiry of the period for which the deposit under this account has been made and accepted. (4) Such deposits may be made in one lump sum or in instalments at any time on or before the due date of furnishing the return of income under sub-section (1) of section 139 of the Act as is applicable in the case of the depositor." Paragraph 7 of the Scheme permits transfer and conversion of account B to account A, subject to the procedure specified thereunder. The said paragraph 7 runs as under: "7. Transfer and conversion of the account.-(1) A depositor may, if he ....
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....posit in account B, and they wanted to transfer the funds from account B to account A by opening account A (savings account). As per paragraph 4(3) of the Scheme, in respect of the deposit made in account B, withdrawal can be made only after the expiry of the period for which the deposit under the said account has been made, except as provided under paragraphs 7 and 9, which provide for transfer of the account and withdrawal from the account, respectively. Hence, it is not in dispute that the petitioners are entitled to seek transfer of their deposit in account B. Coming to the procedure to be followed, paragraph 7(2) provides that the depositor has to apply in Form B together with the deposit receipt for transfer of the amount standi....
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....as made, such withdrawal will be treated as a premature withdrawal, and the amount of interest accrued, if any, shall be calculated subject to the provisions of sub-paragraph (4) of paragraph 8 ...." The specific case of the petitioners is that they have made a request in Form B for transfer complying with the procedure as noted above. Since the abovenoted procedure does not require clearance from the Assessing Officer in Form No. G, it is contended by the petitioners that the action of the first respondent-bank in insisting upon such clearance, is arbitrary and illegal. The case of the first respondent-bank is that as per the Scheme transfer from account B to account A is permissible only after closure of account B and since closure ....
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....f the account. May be that the petitioners, in the case on hand, wanted to transfer the entire amount lying in account B, however, on that ground it cannot be treated as closure of the account. The word "closure" connotes "an act or process of closing something". The dictionary meaning of the word "close" is "bring or come to an end". Even paragraph 13 of the Scheme, which provides for closure of the account, makes it clear that consequent on closure of the account, the deposit office shall pay the amount of balance including interest accrued, by means of crediting such amount to any bank account of the depositor. In other words, the account of the depositor under the Scheme in that bank would come to an end. On the other hand, the trans....