Money in Bank Accounts is a Property Liable for Provisional Attachment u/s 281B | HC

Case Details: Assistant Commissioner of Income-tax vs. Mohammed Salih - [2025] 171 taxmann.com 23 (Kerala)

Judiciary and Counsel Details

• Sathish Ninan & Mrs Shoba Annamma Eapen, JJ.
• Navaneeth N. Nath, CGC Susie B. Varghese & Jose Joseph, SC for the Appellant.
• Gopikrishnan Nambiar, M.K. John Mathai, Joson Manavalan, Kuryan Thomas, Paulose C. Abraham & Raja Kannan for the Respondent.

Facts of the Case

The police seized a huge amount of cash from a car in which the assessee was riding. After recording reason to believe that income chargeable to tax had escaped assessment, proceedings were initiated in relation to the same by the issuance of notice under Section 148.

The expected demand on assessment, including penalty, would be a substantial amount exceeding two crores. The competent authority of the Department ordered provisional attachment of the Bank accounts of the assessee under section 281B.

The matter reached the Kerala High Court.

High Court Held

The High Court held that the word ‘property’ is a word of very wide connotation. It is relevant to note that section 281B(1) provides for the provisional attachment of ‘any property’. The prefix ‘any’ to the word ‘property’ has much significance. It indicates that the word ‘property’ occurring therein is not to be comprehended in a restricted sense.

Therefore, ‘any property’ mentioned in section 281B(1) would take within its sweep, money lying in the bank account also. Section 281B(1) provides for the provisional attachment of any property belonging to the assessee in the manner provided in the Second Schedule to the Act. The Second Schedule to the Act is titled, ‘Procedure for Recovery of Tax’. Evidently, except for the property exempted from attachment under the Code of Civil Procedure, 1908 (CPC), other properties are liable to attachment.

Section 60 CPC provides the property liable to attachment. Noticeably, section 60(1) CPC specifically states that money is an attachable property. Properties that are not liable to attachment have been specified in the proviso to the section. Therefore, money in a bank account is property liable to attachment.

There could be instances where the assessee does not own immovable property sufficient enough to secure the likely demand, but there are sufficient funds in the bank account. The power for provisional attachment is provided to protect the interest of the revenue. There is no warrant to hold that money lying in a bank account is not liable to attachment.

List of Cases Reviewed

• Jilubhai Nanbhai Khachar and Ors. v. State of Gujarat and Ors. AIR (1995 SC 142) (para 9)
• V. Prakashan and K.P. Pankajakshan and Anothe r (1985 CriLJ 951) (para 14)
• Radha Krishnan Industries v. State of Himachal Pradesh [2021 (6) SCC 771 (para 15)
• Gandhi Trading v. Assistant Commissioner of Income-Tax and others (1999 SCC Online 967) (para 17) followed.
• Order of Writ Court in WP(C) no. 9607 OF 2024 dated 13.08.2024 reversed.