Prakash Krishna, J. - (1.) In the present petition challenge is to the legality, validity and propriety of the order passed Under Section 281-B of the Income Tax Act, 1961, hereinafter referred to as the Act, by means of which the petitioner's current Account No. 28430 with the Union Bank of India, Banda Branch having balance as on 29th April, 2002 was Rs. 6,80,905/- and four DRCs (fixed deposit account nos. 7538 to 7541) in the aforesaid Bank were attached under the impugned order dated 22.12.2004, passed by the Income Tax Officer- 6 (2) Kanpur, which is Annexure-7 to the writ petition.
(2.) Briefly stated the facts giving rise to the present petition are as follows :Petitioner No. 1 (hereinafter called as the company) is a private limited company incorporated under the provisions of Companies Act, 1956, vide certificate of incorporation, dated 9th December, 2001 with the Registrar of Companies U.P. and Uttaranchal to carry on the business in real estate and petitioner No. 2 who is the Managing Director is also doing business of Kirana goods in the name and style of M/s Chandra Kamal Agency. He is also the Managing Director of M/s Kanhe Media Pvt Ltd. which is engaged in publication of daily news paper known as 'Sri India.' The case of the petitioners is that none of them are engaged in any manufacturing activities and as such the provisions of Central Excise Act, 1944, are not applicable to them. The officials of the Central Excise Department searched the residential premises of the Managing Director of the Company on 8th June,2002 and seized certain documents, computer and cash. The company is having a current account No. 28430 with the Union Bank of India in which the balance as on 29th April, 2002 was Rs. 680905.00 and also has four DRCs (fixed deposit account No. 7538 to 7541) in the aforesaid Bank amounting to Rs. 44 lacs. The pass book and the fixed deposit receipts were not seized by the officials of the Central Excise Department, but in the Panchnama prepared at the time of search and seizure operation, the current account and the FDRs which are in the name of the petitioner company finds place. It appears that the Branch Manager of the Union Bank of India, subsequently, through his communication dated 29th July, 2002 informed the petitioner company about the order dated 10th July, 2002, passed by the Excise Department, freezing the aforesaid accounts. Challenging the action of the officials of the Excise Department freezing the aforesaid Bank account, the petitioners filed writ petition No. 1186 of 2004 before this court, which was ultimately allowed vide judgment and order dated 3rd December, 2004. The operative portion of the judgment is reproduced below : As we find no provision nor any authority under which the bank account can be freezed pending investigation we are left with no option but to quash the order dated 16th January, 2004 (Annexure 17 to the writ petition) and direct the respondent No. 1 to forthwith release Current Account Nos. 28430 and DRCs Account Nos. 7538 to 7541 with the Union Bank of India, Banda Branch, Banda. As the action of the respondent in freezing the bank accounts have been set aside the petitioner shall be entitled to operate them.
(3.) The Excise Department on 22nd December, 2004 in pursuance of the directions given by this Court informed the Union Bank of India, releasing the freezed account No. 28430 as also the DCR account No. 7538 to 7541. On the same very day the Income Tax Officer-6 (2) Kanpur passed the order dated 22nd December, 2004, exercising the powers conferred on him by virtue of Section 281B of the Act, impugned in the present writ petition. The said order has been passed in order to protect the interest of Revenue as in the opinion of the assessing officer a substantial demand is likely to arise against the assessee, as a result of the assessment proceedings Under Section 153-A, consequent to the search and seizure Under Section 132-A of the IT Act, 1961. The order was passed with the approval of the Commissioner of Income Tax- II, Kanpur.;