CWP No.14318 of 2017 1 IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No. 14318 of 2017 Date of decision: 06.7.2017 Sh. Gurcharan Singh Petitioner Vs. Principal Commissioner of Income Tax-1 and others ..Respondents CORAM: HON BLE MR. JUSTICE AJAY KUMAR MITTAL HON BLE MR. JUSTICE AMIT RAWAL Present: Mr. Rajiv Joshi, Advocate for petitioner. Ajay Kumar Mittal,J. 1. Prayer in this petition filed under Article 226 of Constitution of India is for quashing attachment order dated 06.02.2017, Annexure P.9 read with letter dated 15.03.2017, Annexure P.10 whereby pension account of petitioner has been attached and recovery of alleged tax liability has been ordered against Protective Assessment vide order dated 28.03.2016, Annexure P.1/D. Further prayer has been made for quashing order dated 20.06.2016 and order dated 15.12.2016 passed by respondent Nos.2 and 1 respectively. 2. few facts relevant for decision of controversy involved as narrated in petition may be noticed. petitioner/assessee was bank employee during financial year 2007-08 relevant to assessment year 2008-09. He filed his return at relevant time with Income Tax Office at place of his employment. petitioner was having family agricultural income 1 of 6 ::: Downloaded on - 13-11-2017 11:30:59 ::: CWP No.14318 of 2017 2 from his ancestral agricultural land. petitioner along with other persons entered into agreement to sell dated 5.5.2005 with one Sh. Gurdial Singh, resident of Jalandhar, who himself and as GPA of his family members, agreed for sale of piece of Agricultural land measuring 787 Kanal 6 Marlas for total consideration of ` 2.74 crores. advance money of ` 10 lacs was paid to vendor. land was intended to be purchased along with agricultural implements, irrigation system, Haveli etc for agricultural purposes only. vendor resiled from agreement as he entered into agreement with another person for better sale consideration. petitioner had to file civil suit to protect his interest. suit was decreed and individual sale deeds were got executed as ordered by civil court in suit for specific performance. Respondent No.2 issued notice to petitioner under Section 148 of Income Tax Act, 1961 (in short, Act ) dated 20.03.2015, Annexure P.1/C without recording any reasons. According to petitioner, proceedings under Section 147 by issue of notice under Section 148 of Act are prima facie wrong in view of fact that he was only employee at relevant time and he could not engage himself in any business of profit. petitioner filed return under protest declaring income of ` 2,34,075/- against notice issued under Section 148/142 (1) of Act. Respondent No.2 passed assessment order dated 28.03.2016 whereby net taxable income was assessed and computed wrongly as ` 1,39,64,325/-. Respondent No.2 proceeded to pass this order as protective assessment. petitioner asserts that he was only purchaser of land for consideration of ` 7 lacs. Besides inter se dispute between parties and judgment and decree of civil suit 2 of 6 ::: Downloaded on - 13-11-2017 11:31:00 ::: CWP No.14318 of 2017 3 against petitioner, in another civil suit, petitioner had to refund sum of ` 60 lacs to Lakhvir Singh, which had also been ignored to make hypothetical addition of said amount to income of petitioner from other sources. There was nothing on record to suggest that purchase of land in question was not for agricultural purposes and for self cultivation. petitioner filed application under Section 220(3)/(6) of Act before Income Tax Officer, Hoshiarpur, praying for stay of demand. Vide order dated 20.06.2016, Annexure P.3, application was disposed of in terms of order dated 20.06.2016 passed by Income Tax Officer, Hoshiarpur. Vide order dated 20.6.2016, onerous demand was raised to pay 15% of demand relatable to addition substantively made in case of petitioner. Thereafter, petitioner filed application for stay before Commissioner of Income Tax, Jalandhar. Vide order dated 15.12.2016, Commissioner of Income Tax upheld order of Assessing Officer dated 20.06.2016. assessment order in case of AOP named as AOP comprising Sh. Gurcharan Singh and Tehal Singh through Shri Gurcharan Singh son of Sh. Ram Singh was passed substantively vide order dated 22.03.2016. According to petitioner, orders of protective assessment are passed only with view to shield taxation authorities from laws of limitation, so that tax recovery may not be time barred due to pendency of some civil case or any other reasons. However, being protective assessment and high pitched assessment under Act, such order ought to have been stayed for recovery of demand by Assessing Officer himself. petitioner availed of his statutory remedy of appeal before jurisdictional authority. In revision of order passed by 3 of 6 ::: Downloaded on - 13-11-2017 11:31:00 ::: CWP No.14318 of 2017 4 Assessing Officer, jurisdictional authority i.e. Principal Commissioner of Income Tax failed to appreciate that assessment in this case being highly pitched assessment and protective assessment, same was liable to be stayed for its recovery. Subsequent to order dated 28.03.2016 passed by Assessing Officer, latter wrote to Branch Manager, Punjab and Sind Bank, Garshankar on 06.02.2017 whereby he attached bank account of petitioner for recovery of ` 1,28,98,710/- and respondent No.3 was directed under Section 226 (3) of Act to make payments of amount due on account of income tax, penalty etc from pension account of petitioner directly to respondent No.2. petitioner received letter dated 15.03.2017(Annexure P.10) from respondent No.3 whereby he was apprised about withholding/attachment of pension account. Hence, instant petition before this Court by petitioner. 3. We have heard learned counsel for petitioner 4. According to petitioner, action of respondent No.2 in attaching his account for making recovery of amount is illegal, arbitrary and is liable to be quashed as attachment of pension account is violative of provisions of Section 11 of Pensions Act, 1871 (in short, Pensions Act ). 5. Learned counsel for petitioner had relied upon Section 11 of Pensions Act to submit that pension account could not be attached for recovery of tax. Section 11 of Pensions Act reads thus:- 4 of 6 ::: Downloaded on - 13-11-2017 11:31:00 ::: CWP No.14318 of 2017 5 No pension granted or continued by Government on political considerations, or on account of past services or present infirmities or as compassionate allowance, and no money due or to become due on account of any such pension or allowance, shall be liable to seizure, attachment or sequestration by process of any court at instance of creditor, for any demand against pensioner, or in satisfaction of Decree or Order of any such court. This Section applies to pensions granted or continued after separation of Burma from India, by Government of Burma. 6. perusal of above provisions clearly spells out that no pension granted or continued by Government on political considerations or on account of past services or present infirmities or as compassionate allowance shall be liable to seizure, attachment or sequestration by process of any court at instance of creditor for any demand against pensioner or in satisfaction of decree or order of any such court. present is case of sovereign dues which would not fall in any of categories enumerated therein which are free from attachment. In other words, attachment with which we are concerned in present case was neither by creditor nor founded upon decree or order of Court. It is thus, not of nature contemplated by Section 11 of Pensions Act. Learned counsel for petitioner has not been able to show as to how his case is covered by above provision. Further, Assessing Officer vide order dated 20.6.2016 (Annexure P.3) and Commissioner of Income Tax vide order dated 15.12.2016 (Annexure P.5) have stayed demand relatable to additions made to income of petitioner on protective 5 of 6 ::: Downloaded on - 13-11-2017 11:31:00 ::: CWP No.14318 of 2017 6 basis and directed recovery of 15% of amount due on addition made to income on substantive basis as per provisions of Act. 7. Learned counsel for petitioner has not been able to point out any error in impugned order passed by respondent authorities on stay application or to substantiate his claim that his case is covered by Section 11 of Pensions Act. Consequently, finding no merit in petition, same is hereby dismissed. (Ajay Kumar Mittal) Judge July 06, 2017 (Amit Rawal) gs Judge Whether speaking/reasoned Yes Whether reportable Yes 6 of 6 ::: Downloaded on - 13-11-2017 11:31:00 ::: Gurcharan Singh v. Principal Commissioner of Income-tax-1 and other