B. Ranga Reddy, vs. Principal Commissioner of Income Tax-2,

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WP/14939/2017HC TelanganaHBHC01014371201728 April 2017Bench: J. UMA DEVI,V RAMASUBRAMANIAN2 pages
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What did the High Court hold?

The Tribunal held that while the notice served was technically under Section 148 of the Income Tax Act and not an order of attachment under Section 289, there was a risk of an attachment order being passed by oversight or omission, given that pension amounts cannot be attached. Therefore, to prevent such an eventuality, the writ petition was disposed of with a direction to the respondents not to attach the petitioner's pension amount lying in his savings bank account. The Tribunal did not explicitly decide on the legality of the Section 148 notice itself, focusing solely on preventing the attachment of pension.

What were the facts?

The petitioner, an 85-year-old retired government employee, challenged the attachment of his savings bank account where his monthly pension was credited. The assessment for Assessment Year 2009-10 was reopened, disallowing his claim for long-term capital gains on the sale of agricultural land. This resulted in a tax demand exceeding Rs. 1.00 crore. The petitioner filed a statutory appeal but failed to pay 15% of the disputed tax, leading to the order becoming final. Consequently, a notice of attachment was served, prompting the writ petition.

What were the issues?

1. Whether the pension amount of the petitioner is liable to be attached by the respondents. (Question of law). The petitioner contended that his pension cannot be attached. The revenue, through its learned senior standing counsel, conceded that pension cannot be attached but argued that the notice served was under Section 148 of the Income Tax Act, not an order of attachment under Section 289 of the Act. The revenue did not dispute the petitioner's claim that pension cannot be attached.

Which sections of the Income-tax Act were involved?

Section 148,Section 289

AI-generated summary — verify with the full judgment below

HON’BLE SRI JUSTICE V. RAMASUBRAMANIAN AND HON’BLE MS. JUSTICE J. UMA DEVI

Writ Petition No.14939 of 2017 ORDER: (V. Ramasubramanian, J)

The petitioner has come up with the above writ petition challenging the action of the respondents in attaching his savings bank account wherein the monthly pension drawn by him is credited.

2.

Heard Mr. K. Ramakanth Reddy, learned counsel for the petitioner. Mr. B. Narasimha Sarma, learned senior special standing counsel takes notice for the Department.

3.

The petitioner retired from the State Government service long time ago and he is now 85 years of age. The petitioner sold a land claiming to be an agricultural land and sought long time capital gains for the Assessment Year 2009-10. But the said assessment was reopened and the claim was disallowed. A demand for tax to the tune of more than Rs.1.00 crore was made. The petitioner filed a statutory appeal but could not pay 15% of the disputed tax. This resulted in the order attaining finality.

4.

Since the tax determined was not paid, a notice of attachment was served on the petitioner, forcing the petitioner to come up with the above writ petition.

5.

Learned standing counsel for the department could not dispute the claim of the petitioner that the pension cannot be attached. But the contention of the learned senior standing counsel for the Department is that what has been issued is only a notice

VRS, J & JUD, J

W.P.No.14938 of 2017

2 under Section 148 of the Income Tax Act and not an order of attachment under Section 289 of the Act.

6.

Technically the learned senior standing counsel is correct. But unless the fact that the pension amount cannot be attached is made clear, it is possible that by oversight or omission an order under Section 289 of the Act is also passed.

7.

Therefore, the writ petition is disposed of directing the respondents not to attach the pension amount of the petitioner lying in his savings back account. There will be no order as to costs.

As a sequel thereto, miscellaneous petitions, if any, pending shall stand closed. ________________________ V. RAMASUBRAMANIAN, J

_____________ J. UMA DEVI, J Date: 28-04-2017

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