TaxTMI 
TaxTMI 
2022 (2) TMI 940
X X X X Extracts X X X X
X X X X Extracts X X X X
....nnexure 'B' in relation to land admeasuring 11981 sq.mtr. Land situated at Block No.142, New Block No.166, T.P. 22, F.P.53, Village Valak, Taluka Kamrej, District Surat consequence to the order at Annexure- 'A' dated 29.05.2021. (C) Pending the admission, hearing and final disposal of this petition, to stay operation of the order at Annexure - 'A' to this petition to the limited extent to attachment over land admeasuring 11981 sq.mtr. Land situtated at Block No.142, New Block No.166, T.P. 22, F.P.53, Village Valak, Taluka Kamrej, District Surat as well as to stay the operation of amendment in Village Form Number 7 dated 29.05.2021 (Annexure B); (D) Any other and further relief deemed just and proper begranted in the interest of justice; (E) To provide for the cost of this petition. 2. The facts giving rise to this writ-application may be summarized as under:- 2.1 The writ-applicant is a Partnership Firm. It came to be constituted on 20.11.2014 and got duly registered with the Registrar of Firms on 26.11.2014. 2.2 It appears from the materials on record that a search and seizure was undertaken under Section-132 of the Act at the premises of one Ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....zed having implication of large amount of unaccounted income during the financial year 2013-14 to 2019-20 relevant to AY 2020-21. 3. In view of the seized material found during the course of search conducted u/s.132 in the premises of the assessee which belonged to Shri Arnav Savaliya, there is a likelihood of huge demand being raised in the case of the above assessee on the basis of investigations/enquires being conducted during the course of assessment proceedings. The assessment proceedings u/s.153A for Assessment Year 2014-15 to 2019-20 is in progress. Accordingly, I am of the opinion that for the purpose of protecting the interest of Revenue it is necessary to attach provisionally the properties belonging to the assessee u/s.281B of the I.T. Act, 1961. Hence, following properties are required to be provisionally attached with immediate effect:- IMMOVABLE PROPERTIES ATTACHED All rights and interest of assessee Shri Arnav Savaliya in following properties: Shri Arnav Savaliya (PAN: BRGPS5116K) Particulars Cost as per document executed (Rs. In Cr.) Details of Registration Land at Block No.184, Niyol (50% share) [Niyol-Palsana] 0.48 Vide Do....
X X X X Extracts X X X X
X X X X Extracts X X X X
....issatisfied with the aforesaid action on the part of the department, the writ-applicant is here before this Court with the present writ-application. SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANT:- 4. Mr. S.N. Soparkar, the learned senior counsel assisted by Mr. Bandish Soparkar appearing for the writ-applicant vehemently submitted that the impugned order of provisional attachment in exercise of powers under Section-281B of the Act to the extent of Block No.142, New Block No.166, T.P.-22, F.P.-53, is erroneous in law and without jurisdiction. The argument of the learned senior counsel proceeds on the footing that under Section-281B what can be attached is the property of the assessee. The assessee in the present case is Arnav Savaliya. It is argued that Nitaben Radadiya as one of the partners of the writ-applicant - Firm might have assigned her 2.5% share in the profit of the firm in favour of Arnav Savaliya, but that does not mean that the block No.142, which is otherwise an asset owned by the Partnership Firm would become one of the properties of the assessee, and the same can be attached under Section-281B of the Act. 5. Mr. Soparkar to make good his aforesaid submission, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....perty:- (1) Save as otherwise provided by this rule, property belonging to a partnership shall not be attached or sold in execution of a decree other than a decree passed against the firm or against the partners in the firm as such. (2) The Court may, on the application of the holder of a decree against a partner, make an order charging the interest of such partner in the partnership property and profits with payments of the amount due under the decree and may, by the same or a subsequent order, appoint a receiver of the share of such partner in the profits (whether already declared or accruing) and of any other money which may be coming to him in respect of the partnership, and direct accounts and inquiries and make an order for the sale of such interest or other orders as might have been directed or made if a charge had been made in favour of the decree-holder by such partner, or as the circumstances of the case may require." 9. Order 21 Rule 49 is analogous to the principle of Section-29 of the Partnership Act referred to above. 10. Our attention was, thereafter, drawn to Section-281B of the Act, which reads thus:- 281B. Provisional attachment to....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the asset of the ownership of the writ-applicant - firm. 13. Mr. Soparkar also invited our attention to Rule-32 of the Schedule-2 - Procedure of Recovery of Tax. Rule 32 reads thus:- 32. Attachment of partnership property:- (1) Where the property to be attached consists of an interest of the defaulter, being a partner, in the partnership property, the Tax Recovery Officer may make an order charging the share of such partner in the partnership property and profits with payment of the amount due under the certificate, and may, by the same or subsequent order, appoint a receiver of the share of such partner in the profits, whether already declared or accruing and of any other money which may become due to him in respect of the partnership, and direct accounts and enquiries and make an order for the sale of such interest or such other order as the circumstances of the case may require. (2) The other persons shall be at liberty at any time to redeem the interest charged or, in the case of a sale being directed, to purchase the same." 14. In such circumstances referred to above, Mr. Soparkar prays that there being merit in his writ-application, the same be allowe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he said land although was purchased in the name of the firm i.e.M/s Raghunandan Enterprise vide registered deed no.6362 on 09.04.2015, Smt. Nitaben Shaileshbhai Radadiya, wife of the Shri Shailesh Hasmukhbhai Radadiya, is one of the partners of the firm. It is noticed from the partnership deed that, Shri Shaileshbhai H. Radadiya retired from the firm and Smt. Nitaben Shaileshbhai Radadiya was admitted as a partner in the firm on 14.08.2018 having share of 5% in the firm. It is seen that the wife was awarded the same position as her husband in the firm. Further, it is seen that Shri Arnav M Savaliya has purchased 2.5% share unofficially (on money or cash money) out of 5% share of Nitaben Shailesh Radadiya with an investment of Rs. 1,50,00,000/-. During the course of Search proceedings the statement of Shri Mukesh N. Savaliya (father of Shri Arnav M. Savaliya) was recorded on oath u/s.132(4) of the Income Tax Act, 1961, in which Shri Mukesh N. Savaliya has confronted the same with the incriminating document. The relevant part of the same is as under: In the view of the above, the property situated at B.No.142, New Block No.166, T.P.22, F.No.53, Valak, was provisionally attac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arch or seizure or within a period of sixty days from the date on which the last of the authorizations for search was executed, the authorised officer, for reasons to be recorded in writing, is satisfied that for the purpose of protecting the interest of revenue, it is necessary so to do, he may with the previous approval of the Principal Director General or Director General or the Principal Director or Director, by order in writing, attach provisionally any property belonging to the assessee, and for the said purposes, the provisions of the Second Schedule shall, mutatis mutandis, apply." For the impugned land, the first provisional attachment was done by ITO(Investigation), Surat dated 21.08.2020 after getting due approval from Pr. DIT(Investigation), Surat and during the course of assessment proceedings, the office of respondent has passed the order u/s.281B on 29.05.2021 & again extended vide this office order dated 02.11.2021 in accordance with law. 10. With respect to contentions raised in Para 2.5 and 2.6, it is submitted that the petitioner was required to file his request letter to lift provisional attachment to the office of Pr. Commissioner of Income-ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The impugned land was transferred over and above the registered value and involves on-money payments also. The contention of petitioner that Shri Arnav Mukeshbhai Savaliya is neither the partner in partnership firm nor he hold any share/interest in the petitioner firm at any point of time, is out of context when it comes dealing in on-money, which is generally outside of books of accounts/registered document/deed. 13. With respect to contentions raised in Para 3.2 & 3.3, it is submitted that there is no dispute on the fact that Shri Arnav Mukeshbhai Savaliya is not an official partner in the petitioner firm as per registered deed of firm. The basis of provisional attachment under section 281B is to protect revenue as the incriminating evidence reveals involvement of on-money for 2.5% share in the impugned land and the same was confirmed by Shri Mukesh Savaliya through statement on oath u/s.132(4) of the I.T. Act also. 14. With respect to contentions raised in Para 3.4, it is submitted that as per the Provisional Attachment order u/s.281B of the I.T. Act dated 29.05.2021, the provisional attachment for the impugned land was done only to the extent of 2.5% (for wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....guarantee from a scheduled bank for an amount lower than the fair market value of the property is sufficient to protect the interests of the revenue, he may accept such guarantee and revoke the attachment. 19. Relying on the aforesaid Sub-section (3) of Section 281B of the Act, Ms. Raval would submit that if any tangible security is furnished at this stage by the writ-applicant - Firm to protect the interest of the revenue, there should not be any difficulty in releasing the subject land from provisional attachment. 20. In such circumstances referred to above, Ms. Raval, the learned senior standing counsel appearing for the revenue prays that there being no merit in the writ-application, the same may be rejected. 21. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the revenue could have proceeded to attach the subject property in the form of land, which indisputably is of the ownership of the writ-applicant - Partnership Firm. 22. The plain reading of Section-281B of the Act would make it clear that the same provides for the provisional attachment of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he main partnership. The case on hand indisputably is not one of a sub-partnership though in view of Section-29(1) of the Partnership Act, Arnav Savaliya as an assignee may become entitled to receive the assigned share in the profits from the writ-applicant - Firm, not as a sub-partner because no sub-partnership came into existence, but as an assignee to the share of profit of the assigner-partner viz. Nitaben Shaileshbhai Radadiya. 25. In the overall view of the matter, we are convinced that the provisional attachment of the subject land under Section-281B of the Act at the instance of the revenue is not sustainable in law. 26. For all the forgoing reasons, this writ-application succeeds and is hereby allowed. The impugned order of provisional attachment dated 29.05.2021 to the extent it includes the subject land i.e.Block No.142, New Block No.166, T.P.-22, F.P.-53, admeasuring 11981 sq.mtrs. situated at Village Valak, Taluka Kamrej, District Surat, is hereby quashed and set aside. Rest of the order of provisional attachment of all the properties owned by Arnav Savaliya is not touched. If on the basis of the provisional attachment order, any entries have been mutated in the ....