R VIJAYAKUMAR Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) 1.KANAKARAJ J.The petitioner had filed an application under section 230A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the grant of a certificate to enable him to transfer the property bearing door No. 5, Lake Area, Nungambakkam, Madras, on December 10, 1987. On February 18, 1988, the first respondent wrote to the petitioner that there were arrears to the tune of Rs. 3, 330 in respect of the assessment year 1977-78 and further the assessment proceedings for the years 1984-85 to 1986-87 were pending on account of the non-production of the profit and loss account arising out of the production of the picture called "Kai Kodukkum Kai".

(2.) THEREFORE, a difficulty was expressed in the issue of a certificate under section 230A of the Act and the petitioner was called upon to pay the tax arrears and co-operate with the Department in the completion of the pending assessments. On February 24, 1988, the petitioner caused letter to be sent to the first respondent purporting to co-operate with the Department in respect of the pending assessments. On February 24, 1988, an order of provisional attachment was made against the properties of the petitioner under section 281B of the Act. This attachment covers the property sought to be transferred and for which a certificate under section 230A was applied for. On February 28, 1988, the petitioner paid a sum of Rs. 3, 330 demanded under the letter dated February 18, 1988. On August 24, 1988, there was another order of attachment made under section 281 of the Act. On February 13, 1989, a third order of provisional attachment was made under section 281 B of the Act. On June 14, 1989, the petitioner made a fresh application under section 230A of the Act.

(3.) THE argument, apparently, is that the applicant has to make satisfactory provision for payment of "existing liabilities." On the date of application under section 230A, there was no "existing liability, " according to the petitioner, because assessments were completed only in March, 1990. I am of the opinion that when a provisional attachment is made under section 281 B of the Act, there is a liability to the extent that the applicant, under section 230A, cannot transfer his properties. In other words, the provisional attachment is made with a view to safeguard the Revenue when assessment orders are likely to be passed. It is more like an order of attachment before judgment under the Code of Civil Procedure. THE order of attachment itself is a liability.