MINOR PRIYA VILAS BHAJIAWALA V. INCOME TAX DEPARTMENT

SCA/4777/2018

AI Insights

The case involves Jignesh Kishorebhai Bhajiawala, who challenged a communication from the Deputy Commissioner of Income-tax [Investigation]-II, Surat, which instructed the State Bank of India, Udhana Branch, Surat, not to allow the operation of the petitioner's PPF accounts without clearance from the Income-tax authorities. This directive was issued following the petitioner's deposit of cash during the demonetization period, which was under verification by the Department. The petitioner argued that the communication effectively attached his PPF accounts, which is not permissible under the law. The court's interim order had previously allowed the petitioner to deposit a minimum amount to keep the accounts active, recognizing the potential overreach of the Income-tax Department's directive.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 764149 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 18-09-2018
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MAUNA BHATT
• Assessee Lawyers: NITIN MEHTA
• Keywords: Attachment; Demonetization; Income Tax; Interim order; PPF Account
• Section: 131

Judgement Text

"C/SCA/4411/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION No. 4411 of 2018 With R/SPECIAL CIVIL APPLICATION No. 4777 of 2018 ============================================================= JIGNESH KISHOREBHAI BHAJIAWALA Versus INCOME TAX DEPT ============================================================= Appearance : Mr NITIN MEHTA for Mr CHETAN K PANDYA, Advocates for the PETITIONERS MRS MAUNA M BHATT, Advocate for the RESPONDENT(s) No. 1 NOTICE SERVED BY DS(5) for the RESPONDENT(s) No. 2 ============================================================= CORAM: HONOURABLE Mr. JUSTICE AKIL KURESHI and HONOURABLE Mr. JUSTICE B.N. KARIA 18th September 2018 ORAL ORDER (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI) These petitions arise in the common background. We may record facts from Special Civil Application No. 4411 of 2018. The petitioner has challenged a communication dated 2nd January 2017 issued by the respondent no. 1­Deputy Commissioner of Income­tax [Investigation]­II, Surat written to the Branch Manager, State Bank of India, Udhana Branch, Surat in which, he conveyed as under : “2. A summons under Section 131 of the I.T Act issued on 17.12.2016 which was served upon you., In response to the summons Page 1 of 3 C/SCA/4411/2018 ORDER you have submitted details of PPF account held by Bhaijiawala family with your Branch. 3. You are requested not to allow these persons to operate the same without getting clearance from the undersigned. You are again requested to please verify fixed deposit/account/ cash certificate or saving bank accounts if any held by these persons; if any, and also not to allow operate. List of the PPF accounts held by Bhajiawala family in your branch is enclosed herewith as annexure.” Case of the petitioner is brief. According to him, the Income­ tax authorities cannot attach the petitioner’s Public Provident Fund account. Impugned communication therefore should be struck down. Such action is taken in case of the petitioner’s family members also. Hence, two petitions. Learned advocate Ms. Mauna Bhatt appeared for the Department. She has filed an affidavit dated 24th August 2018. She has submitted that during the period of demonetization of currency, the petitioner had deposited cash amounts which are being verified by the Department through assessment proceedings. To secure interest of the Revenue, impugned communication was issued. She sought to explain that the said communication does not amount to attachment of the petitioners’ PPF accounts. Plain reading of the communication shows that the Bank was asked not to allow the holders of the accounts to Page 2 of 3 C/SCA/4411/2018 ORDER operate the same without clearance from the Income­tax authorities. In whatever language stated, in clear terms this amounts to attachment of the petitioners’ PPF accounts. It was for this reason, we have to pass an interim order dated 27th March 2018 permitting the petitioners to deposit minimum amount of Rs. 500/= in the said accounts to keep the accounts alive, since the last date of the financial year ie., 31st March 2018 was fast approaching. Counsel for the respondent did not dispute that it was outside the authority of the Department to attach the PPF accounts of the petitioners. She only tried to convey that the impugned communication does not amount to attachment, which theory we had already nugated. Under the circumstances, following sentence in the impugned communication dated 2nd January 2017 is rescinded. “You are requested not to allow these persons to operate the same without getting clearance from the undersigned.” Rest of the directions in the letter to continue. Petitions stand disposed of accordingly. [Akil Kureshi, J.] [B.N Karia, J.] Prakash Page 3 of 3 "