Comparison of section 500 "Provisional attachment to protect revenue in certain cases." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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.... Officers. Effective date or commencement is Not stated in the document. Background & Scope Statutory hooks: Clause 500 of the Income Tax Bill, 2025 (Old Version) deals with provisional attachment to protect the revenue in certain cases, referencing existing provisions such as section 413 (mode of attachment) and section 269 (valuation procedure). It also cross-refers to penalty u/s 444 and the Reserve Bank of India Act, 1934 (section 45(1)). The clause defines ceiling triggers (penalty likely to exceed two crore rupees) for the applicability of provisional attachment in penalty proceedings. Definitions: the clause defines "Competent Authority" within the section as "the Principal Chief Commissioner or Chief Commissioner, Principal Commis....

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....es over continued deprivation of property. The reference to valuation u/s 269(3) to (8) indicates reliance on an established valuation regime for determining "fair market value." The Bill imposes temporal limits and renewal/invocation rules to balance revenue protection with taxpayer rights. Exceptions/Provisos The clause contains temporal limits: provisional attachment ceases after six months from the order (sub-section (2)); the Competent Authority may extend this period for reasons recorded in writing, but total extension shall not exceed two years or sixty days after the date of order of assessment or reassessment, whichever is later (sub-section (3)). A guarantee from a scheduled bank, not less than the fair market value of the attac....

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....ct the operation of clause 500 is Not stated in the document. Differences Between the Two Provisions and Practical Impact Both texts are substantively similar but contain minor drafting differences that may have practical consequences. The principal differences and their likely impacts are: * Reference to Valuation Officer provision: Document 1 (Section 500 of Income-tax Act, 2025) states that the Valuation Officer shall estimate fair market value "in the manner provided u/s 269(3) to (7)." Document 2 (Clause 500 of the Income Tax Bill, 2025 (Old Version)) states "in the manner provided u/s 269 (3) to (8)." * Practical impact: the Bill's older version appears to include an additional clause (sub-section (8)) of section 269 in the ....

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....arge penalty proceedings must be aware of the risk of provisional attachment and the need to arrange bank guarantees to obtain revocation. The two crore rupees penalty threshold for invoking attachment in penalty matters is a key trigger. Assessing Officers must secure prior Competent Authority approval and record reasons for extensions, exposing the process to procedural challenge if formalities are not observed. * Record-keeping and evidence: The text places emphasis on written orders, reasons recorded in writing for extensions, and valuation reports from Valuation Officers within thirty days of reference. Taxpayers and Assessing Officers should preserve records of guarantees, references to Valuation Officers, valuation reports, written....