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2025 Supreme(Online)(Mad) 62926
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Mr. KRISHNAN RAMASAMY, J
K.Rethinam – Appellant
Versus
The Tax Recovery Officer, TRO Central 2, Chennai – Respondent
W.P.No.29025 of 2025 | W.M.P.Noss.32565 & 32568 of 2025
For the Appellants/Petitioners: Mr.S.R.Rajagopal, Sr.counsel for Mr.Vaibhav R Venkatesh
For the Respondents: Mr.A.P.Srinivas, Sr.St.counsel & Mr.A.N.R.Jayaprathap, Jr.St.counsel
The finality of income tax assessments at the ITAT level necessitates lifting of prior attachment orders once all dues have been cleared.
Headnote:(A) Income Tax Act, 1961 - Section 153A - Challenge to impugned attachment orders dated 08.04.2022 - Writ petition to quash attachment orders as unreasonable, illegal, and in violation of natural justice - Authority to lift attachment once ITAT's order is confirmed and dues cleared. (Paras 2-22)
(B) Finality of Orders - If the orders at the level of ITAT have attained finality, the Tax Recovery Officer must lift attachments related to assessed dues. (Paras 16-18).
Facts of the case:
The petitioner challenges multiple attachment orders resulting from income tax assessments that have been partly set aside by the CIT(A) and confirmed by the ITAT, with full dues cleared.
Findings of Court:
The inquiry shows that the attachment orders were unwarranted as the petitioner no longer had any dues.
Issues: Whether the earlier assessment orders are final and binding when confirmed by the ITAT.
Ratio Decidendi: The court concluded that finality in assessments mandates the lifting of attachment orders.
Result: Writ petition allowed, and orders for lifting attachments issued.
| Table of Content |
|---|
| 1. factual background of the writ petition. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. arguments regarding the appeal and attachment orders. (Para 7 , 8 , 10) |
| 3. court observations on the appeals and legal precedents. (Para 12 , 13 , 14 , 15 , 16) |
| 4. legal reasoning and established precedents for lifting attachment. (Para 18 , 19 , 20) |
| 5. final order to lift the attachment. (Para 23) |
ORDER
This writ petition has been filed challenging the impugned attachment orders dated 08.04.2022 and to direct the 1st respondent to lift the said attachment orders.
2. The learned Senior counsel appearing for the petitioner would submit that in this case, the respondent-Department had conducted search on 08.12.2016. Pursuant to the said search, they had initiated proceedings against the petitioner and issued notice under Section 153A of the Income Tax Act, 1961 (hereinafter called as “IT Act”). Subsequently, the assessment orders were passed on 06.02.2020 for the AYs 2012-2013 to 2017-2018.
3. As far as the AYs 2015-16 to 2017-2018 are concerned, the Assessing Officer made new additions in the assessment orders dated 06.02.2020. On the other hand, the assessment orders, pertaining to AYs 2012-2013 to 2014-2015, were passed with “Nil” addition. Subsequent to the said assessment order, the impugned attachment orders came to be passed on 08.04.2022.
4. Aggrieved over the aforesaid assessment order, the petitioner filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. After hearing the concerned parties, the CIT(A) had set aside the aforesaid new additions made by the assessing officer and the appeal was partly allowed vide order dated 15.09.2023, which was given effect on 19.10.2023.
5. Thereafter, against the CIT(A) order dated 15.09.2023, the Department had preferred an appeal before the Income Tax Appellate Tribunal (ITAT), whereby, the said order was confirmed by ITAT vide order dated 30.04.2025. In spite of the confirmation order, the respondents had failed to lift the attachment order till date.
6. He would submit that as far as the arrears amount referred in paragraph No.8 of the counter is concerned, the entire amount has already been remitted by the petitioner and thus, as on date the petitioner is not liable to pay any amount to the respondent. In this regard, they filed the entire details before this Court by virtue of statement dated 28.08.2025. Hence, he would contend that the respondent is supposed to have lift the attachment order.
7. Further, he would submit that once if an order attained its finality at the level of ITAT on the factual aspect, then the respondent is bound to lift the attachment order passed against the Assesee. If at all if any appeal is filed before the High Court, the same has to be filed on the aspect of question of law but not on the factual aspect.
8. He would also submit that the aforesaid issue has already been dealt with by this Court in the following two judgements:
i) Sri Lakshmi Brick Industries vs. Tax Recovery Officer and others reported in 2013 SCC OnLine Mad 378 [W.P.Nos.22913 to 22915 & 24101 of 2012, order dated 01.02.2013];
ii) Coromandel Oils P. Ltd., vs. Tax Recovery Officer and others reported in (2017) 10 ITR-OL 56 [W.P.No.26821 of 2016, order dated 14.09.2016];
9. In the above two judgements, it has been held that once the issue attained finality on the factual aspect at the level of ITAT and if the entire arrears has been remitted by the Assessee, the attachment order has to be lifted by the concerned Authority. Hence, he would submit that the said issue is no more res integra and it is very well settled by this Court vide the aforementioned 2 judgements. Thus, he requests this Court to pass appropriate orders.
10. Per contra, the learned Senior Standing counsel appearing for the respondents made objections by stating that the issue has not attained finality at the highest level and the respondents are still in the process of filing the appeal, which is yet to be numbered, due t
