RAM KUMAR SONI S/O SHRI MANOHAR LAL SONI V. PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)

CW/19199/2024

AI Insights

The case involves Ram Kumar Soni, a sole proprietor of M/s. M.B. & Sons Jewellers, who challenged the attachment of his overdraft facility/cash credit by the Income Tax Department. The petitioner argued that the attachment was made without issuing a notice, which is a violation of the statutory scheme under Section 226(3) of the Income Tax Act, 1961. The petitioner also mentioned that both he and the department had pending petitions challenging an order from the Settlement Commission, and that his representations regarding the attachment were not decided. The respondents acknowledged the pending nature of the petition and agreed to examine the representations if directed by the court.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 670866 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 05-05-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: SIDDHARTH BAPNA; MEYHUL MIITTAL
• Assessee Lawyers: SIDDHARTH RANKA; ROHAN CHATTER
• Keywords: Cash credit; Overdraft facility; Attachment proceedings; Statutory scheme; Revocation of attachment
• Section: 226(3)

Judgement Text

"[2025:RJ-JP:18773-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D. B. Civil Writ Petition No. 19199/2024 Ram Kumar Soni S/o Shri Manohar Lal Soni, Aged About 63 Years, Sole Proprietor Of M/s. M.B. & Sons Jewellers, having its address at Old Dujod Gate Fatehpur Road, Anand Nagar, Sikar 332001. ----Petitioner Versus 1. Principal Commissioner of Income Tax (Central), Jaipur having its address at 4Th Floor, Jeevan Nidhi II, LIC Building, Bhawani Singh Road, Jaipur. 2. Deputy Commissioner of Income Tax (Central Circle-3), Jaipur having its address at 4Th Floor, Jeevan Nidhi II, LIC Building, Bhawani Singh Road, Jaipur. ----Respondents For Petitioner : Mr. Siddharth Ranka Advocate with Mr. Rohan Chatter Advocate. For Respondents : Mr. Siddharth Bapna Advocate with Mr. Meyhul Miittal Advocate. HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE MUKESH RAJPUROHIT Order 05/05/2025 1. Heard. 2. Challenge to attachment proceedings is essentially based on alleged violation of statutory scheme engrafted under Section 226(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 3. Learned counsel for the petitioner would submit that notice was not issued and even without notice, attachment took place. He would submit that had a notice been issued, the petitioner [2025:RJ-JP:18773-DB] (2 of 3) [CW-19199/2024] would have brought to the notice of the authority that not only the petitioner, but the department both have filed petitions challenging order dated 22.12.2022 passed by the Settlement Commission. Learned counsel for the petitioner would further submit that even assuming that as on the date when the attachment was made, the liability subsisted, the petitioner still has a case to seek indulgence of the department not to take the steps of attachment, but any other steps taking into consideration the pendency of petitions before this Court or such other steps rather than attaching overdraft facility/cash credit. He would submit that the representations, which were made by the petitioner on 04.12.2024 and 11.12.2024, have also remained pending and not decided though there is power to revoke attachment as provided under Clause (vii) of sub-section (3) of Section 226 of the Act. 4. Learned counsel for the respondents would submit that the petition has remained pending without any notice. However, if so directed, the authorities shall examine the representations of the petitioner and prayer for revocation in accordance with law within a time bound period. 5. Without commenting upon the merits of the case at this stage, but taking into consideration that this petition has remained pending for almost six months and further that there is a liability of payment of Rs. 3 crores and the petitioner has raised the issue with regard to permissibility of attachment of overdraft facility/cash credit, we consider it apposite to dispose off this petition at this stage directing the respondents to examine the representations of the petitioner and take appropriate decision in [2025:RJ-JP:18773-DB] (3 of 3) [CW-19199/2024] the light of the provisions contained in Section 226(3)(vii) of the Act that in appropriate case, even revocation can also be ordered. 6. At this stage, we are, therefore, inclined to dispose off this petition with direction to the respondents to decide the representations of the petitioner at the earliest and in any case within an outer limit of three weeks from today. 7. Writ petition is, accordingly, disposed off. (MUKESH RAJPUROHIT),J (MANINDRA MOHAN SHRIVASTAVA),CJ MANOJ NARWANI-GARIMA/12 "