SOUL Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS writ petition is directed against the notice under Section 226(3) of IT Act, 1961, (hereinafter referred as 'the said Act') issued on 25th July, 2008 by the Dy. CIT, Central Circle -X, New Delhi whereby the manager, Canara Bank, New Delhi, has been directed to attach the debt of the assessee under Section 222 of the said Act and the said bank has been directed to make the payment in pursuance to the said notice in view of the fact that the assessee holds the bank account in the said bank and the assessee/petitioner is allegedly in default of the amount mentioned in the said notice i.e., Rs. 3,57,74,685. A similar notice of the same date has also been issued to the manager Syndicate Bank, Nehru Place, New Delhi where the petitioner also holds an account.

(2.) THE effect of these notices is that the entire banking operations of the petitioner have come to a stand -still. The notices have been issued because there is a demand outstanding against the petitioner. On 2nd Nov., 2004 a search was conducted in the business premises of the petitioner. In the course of search cash to the extent of Rs. 17.92 lacs was seized, which was later on found to be accounted for. On 29th Dec, 2006, the assessment order was passed assessing the petitioner's income at approximately Rs. 7.59 crores as against the returned income of approximately Rs. 10.16 lacs. In fact the assessment of income was approximately 74 times the returned income. A demand notice on the very same date i.e., 29th Dec, 2006 was issued in respect of demand of approximately Rs. 4.31 crores on the basis of the assessed income.

(3.) THE petitioner has also filed an appeal against the assessment order on 22nd Jan., 2007, which is pending before the CIT(A). On 8th June, 2007, a further sum of approximately Rs. 3.28 lacs was adjusted by the Department out of a refund due to one of the partners in the petitioner firm. Since the balance amount had not been recovered, a notice was issued on 31st Aug., 2007 for recovery of the same. On 17th Sept., 2007, a further sum of approximately Rs. 51.05 lacs was recovered by the Department by encashing the bank guarantee which had been given by the petitioner in favour of the Department. The total recovery therefore, till date comes to Rs. 73,56,661.