Writ Petition filed under Article 226 of the Constitution of India praying for issuance v. and in PAN/GIR No.AAEPT1716C dated 02.11.2012 on the file of the 1st

W.P.Nos.12419 & 12284 of 2022For Petitioner in both W.Ps:Mr.G.BaskarFor Respondents – 1 & 2 in both W.Ps:Mr.A.P.Srinivas,Senior Standing CounselFor Respondents – 3 & 4in both W.Ps:Mr.S.MadhusudananFor Respondent – 5in both W.Ps:No AppearanceFor Respondent – 6in both W.Ps:Mr.P.S.GaneshCOMMON ORDERWith the consent of both sides, these writ petitions are taken up for final disposal.2. In these writ petitions, the petitioners herein have challenged the Attachment Notice dated 30.04.2012 issued by the 2nd respondent & another Attachment Notice dated 02.11.2012 issued by the 1st respondent under Section 226(3) of the Income Tax Act, 1961 (hereinafter referred to as “IT Act”) and also, a consequential Rejection Letter dated 21.03.2022 issued by the 1st respondent. 5/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 20223. The brief facts of the case are as follows:The 5th respondent had purchased and commissioned two windmills out of a loan obtained from the 6th respondent Bank. It appears that the 5th respondent fell in arrears of income tax and therefore, the windmills of 5th respondent were attached by the Income Tax Department on 31.05.2012. Prior to the said attachment, the Income Tax Department had issued the Attachment Notices dated 30.04.2012 & 02.11.2012 respectively to the 5th respondent.3.1. During the interregnum, the respective petitioners signed two separate Sale Deeds dated 10.04.2013 to purchase the windmills of 5th respondent and settled all the dues of 5th respondent to the 6th respondent Bank. At the time of transfer of the windmills to the petitioners herein, the Income Tax Department vide communication dated 28.12.2012, informed the 6th respondent Bank that as far as the Prohibitory Order dated 11.10.2012 is concerned, all the accounts and lockers that stood in the name of 5th respondent were lifted with immediate effect. Relevant portion of the said communication reads as under:6/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022“In the Prohibitory Order dated 11.10.2012, all the accounts and lockers in the name of Shri.K.S.Thirumalaivasan, Krishna Energy Pvt. Ltd., Maruthi Electrical Engineers at 100-D-a, Akshya Homes, Velachery Main Road, Guindy, Chennai – 32 were prohibited to operate until further order. The same are hereby released with immediate effect.”3.2. It appears that after the issuance of Attachment Notices dated 30.04.2012 & 02.11.2012, the 5th respondent had filed a writ petition in W.P.No.14087 of 2017 before this Court. The petitioners herein were arrayed as respondents 5 & 6 in the said writ petition. This Court declined to grant the relief sought in W.P.No.14087 of 2017 and disposed of the said writ petition with the following observation:“12. As far as the relief sought for in the present writ petition is concerned, though the respondents 5 and 6 claims that their interests is to be protected, the writ petition is filed by the tax defaulter to quash the attachment notice and therefore, no relief needs to be granted for the respondents 5 and 6. As far as the petitioner is concerned, admittedly, he is a tax defaulter and the reassessment proceedings are pending and the petitioner had sought for to submit certain details in connection with the 153A of the Act. Therefore, in a writ petition filed by a tax defaulter, against whom, Section 153A proceedings are pending, the Court cannot grant the said relief. As far as the respondents 5 and 6 are concerned, it is for them to seek appropriate remedy in the manner known to law. 13. In this view of the fact, the petitioner is not entitled for the relief as such sought for in the present writ petition and the petitioner has 7/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022to participate in the reassessment proceedings in progress under Section 153A of the Act and should co-operate with the Assessing authority for early completion, in order to resolve the issues by availing the opportunities to be provided.14. With this liberty, the writ petition stands disposed of. No costs. Consequently, connected miscellaneous petition is closed.”4. The learned counsel for the petitioners submitted that there are no amounts due and payable by the respective petitioners either to the 5th respondent or to the 6th respondent since the sale of windmills was concluded in favour of the respective petitioners on 10.04.2013. However, in view of the impugned notices and consequential order, the respondents 3 & 4 have refused to effect changes in the records that the windmills are belonged to the respective petitioners pursuant to the separate Sale Deeds dated 10.04.2013 executed by the 5th respondent.5. The learned counsel appearing for the respondents 3 & 4 confirmed that as on date, there are no amounts due and payable by the respective petitioners to the 5th respondent. He also submitted that even the petitioners herein have not raised any invoice for the energy supplied by them from their wind mills.8/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 20226. On the other hand, the learned Senior Standing Counsel appearing for the respondents 1 & 2 submitted that the windmills stood attached as early as on 31.05.2012 and the Notice in this regard was received by the 5th respondent on 01.06.2012. He further submitted that without the knowledge of Income Tax Department, the windmills have been sold by the 5th respondent to the respective petitioners by virtue of separate Sale Deeds dated 10.04.2013. Hence, there is no case made out by the petitioners herein for vacating the Attachment Notices issued under Section 226(3) of the IT Act by the Income Tax Department. 7. I have considered the arguments advanced by the learned counsel on either side and I have also perused the materials available on record.8. At this juncture, it is pertinent to state that as per Section 226(3)(i) of the IT Act, the Assessing Officer or Tax Recovery Officer may, at any time or from time to time, by notice in writing require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee, to 9/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022pay to the Assessing Officer or Tax Recovery Officer either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount. 9. The purpose of Section 226(3) of the IT Act is only to persuade a person who owes money to the assessee to pay the same directly to the Income Tax Department represented either by Assessing Officer or Tax Recovery Officer. Hence, Section 226(3) of the IT Act cannot be pressed into service, if no amounts were due by the petitioners to the 5th respondent. Therefore, to that extent, the impugned notices and consequential letter are liable to be quashed. 10. However, the fact remains that the Income Tax Department had issued Notice with regard to the attachment of windmills on 31.05.2012. It was received by the 5th respondent on 01.06.2012. Therefore, it is open to the Income Tax Department to work out for any relief that may be available 10/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022to it by attaching the windmills to sale in accordance with the provisions of the IT Act and Rules made under.11. In the result, these writ petitions are allowed and the impugned Notice dated 30.04.2012 issued by the 2nd respondent & Notice dated 02.11.2012 issued by the 1st respondent and also, a consequential Rejection Letter dated 21.03.2022 issued by the 1st respondent are quashed. Liberty is granted to the Income Tax Department to proceed further, in accordance with law. No costs. Consequently, connected miscellaneous petitions are closed.06.12.2024mrr Index : Yes/NoSpeaking Order (or) Non-Speaking Order11/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022To1.The Tax Recovery Officer, Central – 1, Room No.118, 1st Floor, Investigation Building, No.46, (Old No.108) Mahatma Gandhi Road, Chennai – 600 034. Previously assessed by The Tax Recovery Officer – XVIII, Range – V, Chennai – 600 034.2.The Assistant Commissioner of Income Tax, Central Circle – 1 (4), New Income Tax Building, No.46, (Old No.108) Mahatma Gandhi Road, Chennai – 600 034. Previously assessed by The Assistant Commissioner of Income Tax, Business Circle – V (i/c), Chennai – 600 034.3.The Chairman, TANGEDCO (TNEB), No.144, Anna Salai, Chennai – 600 002.4.The General Manager/Superintending Engineer, Tirunelveli Electricity Distribution Circle, TANGEDCO, Maharaja Nagar, Tirunelveli – 627 011.5.Central Bank of India, Ambattur Branch, 270/560, MTH Road, INTUC Building, Chennai – 600 098.12/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022C.SARAVANAN, J.mrrW.P.Nos.12419 & 12284 of 202206.12.202413/13

W.P.Nos.12419 & 12284 of 2022For Petitioner in both W.Ps:Mr.G.BaskarFor Respondents – 1 & 2 in both W.Ps:Mr.A.P.Srinivas,Senior Standing CounselFor Respondents – 3 & 4in both W.Ps:Mr.S.MadhusudananFor Respondent – 5in both W.Ps:No AppearanceFor Respondent – 6in both W.Ps:Mr.P.S.GaneshCOMMON ORDERWith the consent of both sides, these writ petitions are taken up for final disposal.2. In these writ petitions, the petitioners herein have challenged the Attachment Notice dated 30.04.2012 issued by the 2nd respondent & another Attachment Notice dated 02.11.2012 issued by the 1st respondent under Section 226(3) of the Income Tax Act, 1961 (hereinafter referred to as “IT Act”) and also, a consequential Rejection Letter dated 21.03.2022 issued by the 1st respondent. 5/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 20223. The brief facts of the case are as follows:The 5th respondent had purchased and commissioned two windmills out of a loan obtained from the 6th respondent Bank. It appears that the 5th respondent fell in arrears of income tax and therefore, the windmills of 5th respondent were attached by the Income Tax Department on 31.05.2012. Prior to the said attachment, the Income Tax Department had issued the Attachment Notices dated 30.04.2012 & 02.11.2012 respectively to the 5th respondent.3.1. During the interregnum, the respective petitioners signed two separate Sale Deeds dated 10.04.2013 to purchase the windmills of 5th respondent and settled all the dues of 5th respondent to the 6th respondent Bank. At the time of transfer of the windmills to the petitioners herein, the Income Tax Department vide communication dated 28.12.2012, informed the 6th respondent Bank that as far as the Prohibitory Order dated 11.10.2012 is concerned, all the accounts and lockers that stood in the name of 5th respondent were lifted with immediate effect. Relevant portion of the said communication reads as under:6/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022“In the Prohibitory Order dated 11.10.2012, all the accounts and lockers in the name of Shri.K.S.Thirumalaivasan, Krishna Energy Pvt. Ltd., Maruthi Electrical Engineers at 100-D-a, Akshya Homes, Velachery Main Road, Guindy, Chennai – 32 were prohibited to operate until further order. The same are hereby released with immediate effect.”3.2. It appears that after the issuance of Attachment Notices dated 30.04.2012 & 02.11.2012, the 5th respondent had filed a writ petition in W.P.No.14087 of 2017 before this Court. The petitioners herein were arrayed as respondents 5 & 6 in the said writ petition. This Court declined to grant the relief sought in W.P.No.14087 of 2017 and disposed of the said writ petition with the following observation:“12. As far as the relief sought for in the present writ petition is concerned, though the respondents 5 and 6 claims that their interests is to be protected, the writ petition is filed by the tax defaulter to quash the attachment notice and therefore, no relief needs to be granted for the respondents 5 and 6. As far as the petitioner is concerned, admittedly, he is a tax defaulter and the reassessment proceedings are pending and the petitioner had sought for to submit certain details in connection with the 153A of the Act. Therefore, in a writ petition filed by a tax defaulter, against whom, Section 153A proceedings are pending, the Court cannot grant the said relief. As far as the respondents 5 and 6 are concerned, it is for them to seek appropriate remedy in the manner known to law. 13. In this view of the fact, the petitioner is not entitled for the relief as such sought for in the present writ petition and the petitioner has 7/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022to participate in the reassessment proceedings in progress under Section 153A of the Act and should co-operate with the Assessing authority for early completion, in order to resolve the issues by availing the opportunities to be provided.14. With this liberty, the writ petition stands disposed of. No costs. Consequently, connected miscellaneous petition is closed.”4. The learned counsel for the petitioners submitted that there are no amounts due and payable by the respective petitioners either to the 5th respondent or to the 6th respondent since the sale of windmills was concluded in favour of the respective petitioners on 10.04.2013. However, in view of the impugned notices and consequential order, the respondents 3 & 4 have refused to effect changes in the records that the windmills are belonged to the respective petitioners pursuant to the separate Sale Deeds dated 10.04.2013 executed by the 5th respondent.5. The learned counsel appearing for the respondents 3 & 4 confirmed that as on date, there are no amounts due and payable by the respective petitioners to the 5th respondent. He also submitted that even the petitioners herein have not raised any invoice for the energy supplied by them from their wind mills.8/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 20226. On the other hand, the learned Senior Standing Counsel appearing for the respondents 1 & 2 submitted that the windmills stood attached as early as on 31.05.2012 and the Notice in this regard was received by the 5th respondent on 01.06.2012. He further submitted that without the knowledge of Income Tax Department, the windmills have been sold by the 5th respondent to the respective petitioners by virtue of separate Sale Deeds dated 10.04.2013. Hence, there is no case made out by the petitioners herein for vacating the Attachment Notices issued under Section 226(3) of the IT Act by the Income Tax Department. 7. I have considered the arguments advanced by the learned counsel on either side and I have also perused the materials available on record.8. At this juncture, it is pertinent to state that as per Section 226(3)(i) of the IT Act, the Assessing Officer or Tax Recovery Officer may, at any time or from time to time, by notice in writing require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee, to 9/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022pay to the Assessing Officer or Tax Recovery Officer either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount. 9. The purpose of Section 226(3) of the IT Act is only to persuade a person who owes money to the assessee to pay the same directly to the Income Tax Department represented either by Assessing Officer or Tax Recovery Officer. Hence, Section 226(3) of the IT Act cannot be pressed into service, if no amounts were due by the petitioners to the 5th respondent. Therefore, to that extent, the impugned notices and consequential letter are liable to be quashed. 10. However, the fact remains that the Income Tax Department had issued Notice with regard to the attachment of windmills on 31.05.2012. It was received by the 5th respondent on 01.06.2012. Therefore, it is open to the Income Tax Department to work out for any relief that may be available 10/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022to it by attaching the windmills to sale in accordance with the provisions of the IT Act and Rules made under.11. In the result, these writ petitions are allowed and the impugned Notice dated 30.04.2012 issued by the 2nd respondent & Notice dated 02.11.2012 issued by the 1st respondent and also, a consequential Rejection Letter dated 21.03.2022 issued by the 1st respondent are quashed. Liberty is granted to the Income Tax Department to proceed further, in accordance with law. No costs. Consequently, connected miscellaneous petitions are closed.06.12.2024mrr Index : Yes/NoSpeaking Order (or) Non-Speaking Order11/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022To1.The Tax Recovery Officer, Central – 1, Room No.118, 1st Floor, Investigation Building, No.46, (Old No.108) Mahatma Gandhi Road, Chennai – 600 034. Previously assessed by The Tax Recovery Officer – XVIII, Range – V, Chennai – 600 034.2.The Assistant Commissioner of Income Tax, Central Circle – 1 (4), New Income Tax Building, No.46, (Old No.108) Mahatma Gandhi Road, Chennai – 600 034. Previously assessed by The Assistant Commissioner of Income Tax, Business Circle – V (i/c), Chennai – 600 034.3.The Chairman, TANGEDCO (TNEB), No.144, Anna Salai, Chennai – 600 002.4.The General Manager/Superintending Engineer, Tirunelveli Electricity Distribution Circle, TANGEDCO, Maharaja Nagar, Tirunelveli – 627 011.5.Central Bank of India, Ambattur Branch, 270/560, MTH Road, INTUC Building, Chennai – 600 098.12/13 https://www.mhc.tn.gov.in/judis W.P.Nos.12419 & 12284 of 2022C.SARAVANAN, J.mrrW.P.Nos.12419 & 12284 of 202206.12.202413/13