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We heard Sri J.N. Mathur, Senior Advocate assisted by Sri Waseeq Uddin, learned counsel for the petitioner and Sri Ghanshyam Chaudhary, learned counsel for the respondents.

Learned counsel for the petitioner relying upon the judgment in Sahara India (Firm) Lucknow Vs. Commissioner of Income Tax,Central-1and another, (2008) 14 SCC 151 has submitted that by means of attachment of all the accounts of the petitioner, the business has come to standstill. According to him the action contemplated under Section 281B of the Act, is causing serious adverse consequences to the petitioner and in view of the ratio laid down by the Apex Court. In the aforesaid judgement reasonable opportunity of being heard, should have been provided to whom the order is proposed, even if the statutory provision excludes the application of pre-decisional hearing. He also relied upon a judgment of Apex Court in C.B. Gautam Vs. Union of India and others (1993) 11 SCC 78, wherein their Lordships while dealing with the provision of Section 269UD of the Act, almost similar view was propounded. He also relied upon the judgement of the jurisdictional court reported in (2006) 201 CTR Allahabad, 268 Raghuram Grah Pvt. Ltd. and others Vs. Income Tax Officer and others and submitted that the order under Section 281 B should be passed on sound basis and opinion formed by the assessing officer should be on the basis of material available on record. It may not be based on gossip or on hearsay.

The perusal of scheme of this section provides that legislation has introduced this provision to protect the interest of revenue in appropriate cases. A safeguard has been provided in exercise of jurisdiction by the Assessing Officer that before implementing its opinion, he must have sought prior approval of his own action.

Section 281B is virtually a provision lite attachment before the judgment as provided in Order 38 Rule 5 of the CPC and the aim of introducing this provision is virtually to protect the interest of revenue. The provision clearly speaks that this power can be exercised by the Assessing Officer during the course of assessment of any income of assessee either during the course of original proceeding or assessment or re-assessment of any income which has been escaped assessment. The next requirement is that assessing officer is of the opinion that for the purpose of protecting the interest of revenue, it is necessary to do so and to check the arbitrariness of the assessing officer, a rider has been imposed that previous approval of Chief Commissioner, Commissioner, Director General or Director would be necessary. This previous approval would not be oral but shall be in writing. The provisional attachment shall cease to have effect after the expiry of a period of six month from the date of the order or the order for extended period as provided under this Section, manner in which this provisional attachment is to be made as given in Schedule-II.

We have considered the submissions of the learned counsel for the parties.

We are of the view that this writ petition lacks merits for the reasons assigned hereinbelow:-

(1)The statutory provision of Section 281B does not contain the requirement of hearing before passing the order under this section to the assessee.

(2)The judgments cited by the petitioner, are not related to the provisions contained in Section 281B but they are related to Section 142 (2A) of the Act and Chapter XX-C of the Act having section 269-UD.

(3) So far as Section 142 (2A) is concerned, the provisions contained therein have been substantially amended and proviso has been added to Section 142 (2A) with effect from 1.6.2007 which provide that no direction for special audit shall be issued without affording reasonable opportunity of hearing to the assessee.

(4)So far as Chapter XX-C is concerned, it has also been substantially amended and sub-section (1A) of section 269UD provides that appropriate authority shall give reasonable opportunity of being heard to the transferer, the person in occupation of the immovable property before passing the order of pre-emptive purchase. But so far as provision of section 281B is concerned, statute has not yet decided to make provisions of giving reasonable opportunity to the assessee before passing an order under Section 281B of the Act.