Section 281B:
Provisional attachment to protect revenue in certain cases.
2(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 1
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 34
Principal Chief Commissioner or Chief Commissioner, 5
Principal Commissioner or
Commissioner, 6
Principal Director General or Director General or 7
Principal Director or Director, by
order in writing, attach provisionally any property belonging to the assessee in the manner provided in the
Second Schedule.
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(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):
Provided that the 910
Principal Chief Commissioner or Chief Commissioner, 11
Principal
Commissioner or Commissioner, 12
Principal Director General or Director General or 13
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 14
two years or sixty days after the date of order of assessment or reassessment, whichever is
later.
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(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.
(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.
(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.
(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.
(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).
(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.
(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).
Notes:
1. Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 1-4-1988).
2. Ins. by Act 41 of 1975, s. 74 (w.e.f. 1-10-1975).
3. 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).
4. Subs. by Act 25 of 2014, s. 4, for “Chief Commissioner” (w.e.f. 1-6-2013).
5. Subs. by s. 4, ibid., for “Commissioner” (w.e.f. 1-6-2013).
6. Subs. by s. 4, ibid., for “Director General” (w.e.f. 1-6-2013).
7. Subs. by s. 4, ibid., for “Director” (w.e.f. 1-6-2013).
8. The Explanation omitted by Act 28 of 2016, s. 111 (w.e.f. 1-6-2016).
9. 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).
10. Subs. by Act 25 of 2014, s. 4, for “Chief Commissioner” (w.e.f. 1-6-2013).
11. Subs. by s. 4, ibid., for “Commissioner” (w.e.f. 1-6-2013).
12. Subs. by s. 4, ibid., for “Director General” (w.e.f. 1-6-2013).
13. Subs. by s. 4, ibid., for “Director” (w.e.f. 1-6-2013).
14. Subs. by s. 75, ibid., for “two years” (w.e.f. 1-10-2014).
15. The Second and third proviso omitted by s. 75, ibid. (w.e.f. 1-10-2014).
16. Ins. by Act 28 of 2016, s. 111 (w.e.f. 1-6-2016).