Provisional attachment to protect revenue in certain cases.

1. (1) Where, during the pendency of any proceeding for the assessment of any income or for the assessment or reassessment of any income which has escaped assessment, the 2[Assessing Officer] is of the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, he may, with the previous approval of the 4[5[Principal Chief Commissioner or Chief Commissioner], 6[Principal Commissioner or Commissioner], 7[Principal Director General or Director General] or 8[Principal Director or Director]], by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the Second Schedule. 9*
2. (2) Every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1): 9. The Explanation omitted by Act 28 of 2016, s. 111 (w.e.f. 1-6-2016). Provided that the 1[2[Principal Chief Commissioner or Chief Commissioner], 3[Principal Commissioner or Commissioner], 4[Principal Director General or Director General] or 5[Principal Director or Director]] may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so, however, that the total period of extension shall not in any case exceed 6[two years or sixty days after the date of order of assessment or reassessment, whichever is later].]

¹ Subs. by Act 41 of 1975, s. 73, for section 281 (w.e.f. 1-10-1975).

² Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 1-4-1988).

³ Ins. by Act 41 of 1975, s. 74 (w.e.f. 1-10-1975).

⁴ Subs. by Act 26 of 1997, s. 57, for “Chief Commissioner or Commissioner” (w.e.f. 1-10-1996). Earlier “Chief Commissioner or Commissioner” was substituted for “Commissioner” by Act 4 of 1988, s. 2 (w.e.f. 1-4-1988).

⁵ Subs. by Act 25 of 2014, s. 4, for “Chief Commissioner” (w.e.f. 1-6-2013).

⁶ Subs. by s. 4, ibid., for “Commissioner” (w.e.f. 1-6-2013).

⁷ Subs. by s. 4, ibid., for “Director General” (w.e.f. 1-6-2013).

⁸ Subs. by s. 4, ibid., for “Director” (w.e.f. 1-6-2013).

7* 8[(3) Where the assessee furnishes a guarantee from a scheduled bank for an amount not less than the fair market value of the property provisionally attached under sub-section (1), the Assessing Officer shall, by an order in writing, revoke such attachment:

Provided that where the Assessing Officer is satisfied that a guarantee from a scheduled bank for an amount lower than the fair market value of the property is sufficient to protect the interests of the revenue, he may accept such guarantee and revoke the attachment.

1. (4) The Assessing Officer may, for the purposes of determining the value of the property provisionally attached under sub-section (1), make a reference to the Valuation Officer referred to in section 142A, who shall estimate the fair market value of the property in the manner provided under that section and submit a report of the estimate to the Assessing Officer within a period of thirty days from the date of receipt of such reference.
2. (5) An order revoking the provisional attachment under sub-section (3) shall be made(i) within forty-five days from the date of receipt of the guarantee, where a reference to the Valuation Officer has been made under sub-section (4); or (ii) within fifteen days from the date of receipt of guarantee in any other case.
3. (6) Where a notice of demand specifying a sum payable is served upon the assessee and the assessee fails to pay that sum within the time specified in the notice of demand, the Assessing Officer may invoke the guarantee furnished under sub-section (3), wholly or in part, to recover the amount.
4. (7) The Assessing Officer shall, in the interests of the revenue, invoke the bank guarantee, if the assessee fails to renew the guarantee referred to in sub-section (3), or fails to furnish a new guarantee from a scheduled bank for an equal amount, fifteen days before the expiry of the guarantee referred to in sub-section (3).
5. (8) The amount realised by invoking the guarantee referred to in sub-section (3) shall be adjusted against the existing demand which is payable by the assessee and the balance amount, if any, shall be deposited in the Personal Deposit Account of the Principal Commissioner or Commissioner in the branch of the Reserve Bank of India or the State Bank of India or of its subsidiaries or any bank as may be appointed by the Reserve Bank of India as its agent under the provisions of sub-section (1) of section 45 of the Reserve Bank of India Act, 1934 (2 of 1934) at the place where the office of the Principal Commissioner or Commissioner is situate. 7. The Second and third proviso omitted by s. 75, ibid. (w.e.f. 1-10-2014).
6. (9) Where the Assessing Officer is satisfied that the guarantee referred to in sub-section (3) is not required any more to protect the interests of the revenue, he shall release that guarantee forthwith. Explanation.—For the purposes of this section, the expression “scheduled bank” shall mean a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934).]

¹ Subs. by Act 26 of 1997, s. 57, for “Chief Commissioner or Commissioner” (w.e.f. 1-10-1996). Earlier “Chief Commissioner or Commissioner” was substituted for “Commissioner” by Act 4 of 1988, s. 2 (w.e.f. 1-4-1988).

² Subs. by Act 25 of 2014, s. 4, for “Chief Commissioner” (w.e.f. 1-6-2013).

³ Subs. by s. 4, ibid., for “Commissioner” (w.e.f. 1-6-2013).

⁴ Subs. by s. 4, ibid., for “Director General” (w.e.f. 1-6-2013).

⁵ Subs. by s. 4, ibid., for “Director” (w.e.f. 1-6-2013).

⁶ Subs. by s. 75, ibid., for “two years” (w.e.f. 1-10-2014).

⁸ Ins. by Act 28 of 2016, s. 111 (w.e.f. 1-6-2016).