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Discussion > Taxation > Income Tax > Income Tax Attachment Order   Unanswered Threads Post New Topic

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There are 6 Replies to this message



Radhika Rangarajan


Staff
[ Scorecard : 42]
Posted On 27 September 2009 at 15:22 Report Abuse

I am a Bank employee.

Whether IT attachment order can attach the future credits in a Bank Account?

We received an attachment order from IT at 11.20 a.m. on a day and at that time the balance in the account was Rs 40000/= but there was a RTGS credit from an upcoutry centre of Rs 3.00 lacs yet to be vouched by the bank and pending in the bank's central server. Normally Bank vouches such entries only in the evening or afternoon because of various procedures.The IT authorities are demanding this credit also to be attached.

Our Bank Manuals say that only the available credit in the account can be attached by IT Attachment Orders whereas the garnishee order attaches the existing or future credits.

The IT commissioner threatened the Bank Manager that he will attach the salary of Manager for non compliance of his orders.The Manager ultimately was forced under pressure and attched the amount and remitted to IT.The customer has now gone to the Court. What is the correct legal position in this case as on date?



PJANARDHANA REDDY


ADVOCATE & DIRECTOR
[ Scorecard : 5300]
Posted On 27 September 2009 at 18:14 Report Abuse

THE CUSTOMER HAS ALREADY MOVED THE COURT ON GARNEESH ORDER,BETTER KEEP THE 3 LAKH IN SUNDRY A/C,UNTILL THE CASE/DECREE FINALISES  IN THE COURT


Radhika Rangarajan


Staff
[ Scorecard : 42]
Posted On 28 September 2009 at 16:44 Report Abuse

We would like to know the position of law in respect of IT attachment order received by a Bank to attach a customer's account.

"Whether the available balance alone is attachable by the Income Tax Attachment order or the credits likely to received subsequently in the account are also attachable."

Are there any important legal decisions available in AIR Journals to support the stand taken by the Bank's Book of Instructions or are there any latest judgements to support the stand taken by the IT commissioner?

Please enlighten further.


PJANARDHANA REDDY


ADVOCATE & DIRECTOR
[ Scorecard : 5300]
Posted On 29 September 2009 at 08:28 Report Abuse

 

1 Ashwin S. Mehta and Anr. Vs. Custodian and Ors. Coram: S.B. SINHA P.P. NAOLEKAR 03/01/2006
2 M/s Gammon India Ltd. Vs. Spl. Chief Secretary & Ors Coram: RUMA PAL DR. AR. LAKSHMANAN DALVEER BHANDARI 16/02/2006
3 Zahira Habibullah Sheikh & Anr Vs. State of Gujarat & Ors Coram: ARIJIT PASAYAT H.K. SEMA 08/03/2006
4 Mcdermott International Inc. Vs. Burn Standard Co. Ltd. & Ors. Coram: B.P. SINGH S.B. SINHA 12/05/2006
5 Standard Chartered Bank Vs. Andhra Bank Financial Services Ltd. & Ors. Coram: Y.K. SABHARWAL B. N. SRIKRISHNA P.P. NAOLEKAR 05/05/2006
6 Rangnath Haridas Vs. Dr. Shrikant B. Hegde Coram: S. B. SINHA DALVEER BHANDARI 22/08/2006
7 Paramjeet Singh Patheja Vs. ICDS Ltd. Coram: DR. AR. LAKSHMANAN LOKESHWAR SINGH PANTA 31/10/2006
8 M/s Transcore Vs. Union of India & Anr Coram: ARIJIT PASAYAT S. H. KAPADIA 29/11/2006
9 Shreedhar Govind Kamerkar Vs. Yesahwant Govind Kamerkar and Anr Coram: S.B. SINHA MARKANDEY KATJU 12/12/2006
10 Alpesh Navinchandra Shah Vs. State of Maharashtra & Ors Coram: DR. AR. LAKSHMANAN ALTAMAS KABIR 26/02/2007
11 Greater Bombay Co-op. Bank Ltd Vs. M/s United Yarn Tex. Pvt. Ltd. & Ors Coram: B. N. AGRAWAL P. P. NAOLEKAR LOKESHWAR SINGH PANTA 04/04/2007
12 Bidhannagar (Salt Lake) Welfare Asson Vs. Central Valuation Board & Ors Coram: S.B. SINHA MARKANDEY KATJU 18/05/2007
13 Tax Recovery Officer,Central Range-1 Vs. Custodian the Special Court( T.O.R.T.S) Act, 1992 & ors. Coram: G.P. MATHUR P.K. BALASUBRAMANYAN 17/08/2007
14 Administrator, Unit Trust of India Vs. B.M. Malani & Ors Coram: S.B. SINHA HARJIT SINGH BEDI 11/10/2007
15 SUDHIR S.MEHTA & ORS. Vs. CUSTODIAN & ANR. Coram: S.B. SINHA V.S. SIRPURKAR 16/01/2008
1 2
 

PJANARDHANA REDDY


ADVOCATE & DIRECTOR
[ Scorecard : 5300]
Posted On 29 September 2009 at 08:29 Report Abuse


Vineet


Director
[ Scorecard : 3124]
Posted On 06 October 2009 at 11:13 Report Abuse

If the attachment notice is under section 226(3) of Income Tax Act, it applies for any future credits also in respect of such sum sufficient to to discharge the liabilities of assessee as mentioned in the notice and therefore the same is in nature of garnishee notice. So the authorities are justified in claiming attachment of amount credited to assesse's account post receipt of notice.


Vineet


Director
[ Scorecard : 3124]
Posted On 09 October 2009 at 01:03 Report Abuse

Dear Radhika

The relevant sub-section (3) of Section 226 of Income Tax Act, 1961

(3) (i) The 30[Assessing] Officer 31[or Tax Recovery Officer] may, at any time or from time to time, by notice in writing require any person from whom money is due or may become due32 to the assessee or any person who holds or may subsequently hold money33 for or on account of the assessee to pay to the 34[Assessing] Officer 35[or Tax Recovery Officer] either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount.
(ii) A notice under this sub-section may be issued to any person who holds or may subsequently hold any money for or on account of the assessee jointly with any other person and for the purposes of this sub-section, the shares of the joint holders in such account shall be presumed, until the contrary is proved, to be equal.
(iii) A copy of the notice shall be forwarded to the assessee at his last address known to the 34[Assessing] Officer 35[or Tax Recovery Officer], and in the case of a joint account to all the joint holders at their last addresses known to the 34[Assessing] Officer 35[or Tax Recovery Officer].
(iv) Save as otherwise provided in this sub-section, every person to whom a notice is issued under this sub-section shall be bound to comply with such notice, and, in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or any other document to be produced for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary.
(v) Any claim respecting any property in relation to which a notice under this sub-section has been issued arising after the date of the notice shall be void as against any demand contained in the notice.
(vi) Where a person to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee, then nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the 36[Assessing] Officer 37[or Tax Recovery Officer] to the extent of his own liability to the assessee on the date of the notice, or to the extent of the assessees liability for any sum due under this Act, whichever is less.
(vii) The 36[Assessing] Officer 37[or Tax Recovery Officer] may, at any time or from time to time, amend or revoke any notice issued under this sub-section or extend the time for making any payment in pursuance of such notice.
(viii) The 36[Assessing] Officer 37[or Tax Recovery Officer] shall grant a receipt for any amount paid in compliance with a notice issued under this sub-section, and the person so paying shall be fully discharged from his liability to the assessee to the extent of the amount so paid.
(ix) Any person discharging any liability to the assessee after receipt of a notice under this sub-section shall be personally liable to the 36[Assessing] Officer 37[or Tax Recovery Officer] to the extent of his own liability to the assessee so discharged or to the extent of the assessees liability for any sum due under this Act, whichever is less.
(x) If the person to whom a notice under this sub-section is sent fails to make payment in pursuance thereof to the 36[Assessing] Officer 37[or Tax Recovery Officer], he shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were an arrear of tax due from him, in the manner provided in sections 222 to 225 and the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under section 222.


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