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1. The present writ petitions have been filed by NDTV Ltd. (hereinafter, "NDTV") against the notice proposing reassessment proceedings initiated by the Commissioner of Income Tax (hereinafter, "Respondent" or "CIT" or "Revenue") under Section 147/148 of the Income Tax Act, 1961 (hereinafter, "Act") and the order of provisional attachment of Petitioner's assets under Section 281B of the Act. Since the two writ petitions arise out of common set of facts, the brief facts are set-out below.

Issue 2:

46. It is urged and argued by the learned counsel for NDTV that the order for provisional attachment of NDTV's assets is mala fide, patently illegal and in violation of the provisions of Section 281B of the Act. It is submitted that the Respondent has failed to demonstrate that NDTV was likely to thwart the attempt of the Revenue to recover legitimate taxes. In this regard, NDTV stressed that it had regularly assessed to tax for the past two decades. Further, NDTV argued that the extraordinary power under Section 281B cannot be invoked merely on grounds of difficulty in recovering taxes and the Respondent has failed to indicate any overt activities of NDTV in alienating its assets to the detriment of the Respondent. NDTV argued that there were no enforceable tax demands at present and the estimated tax demand of ` 328.96 crores, if arises, can be enforced against the assets of NDTV which are valued at `675.35 crores.

49. This issue involves the application of Section 281B of the Act. For convenience, the relevant provision of the Act is reproduced below:

"Section 281B-

(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 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 Principal Chief Commissioner or Chief Commissioner, Principal Commissioner or Commissioner, Principal Director General or Director General or Principal Director or Director, by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the Second Schedule....."

51. In VLS Finance (supra), the Court relied upon the prima facie investigations conducted by the investigation wing that indicated the manipulation of the Profit & Loss A/c by the assessee to indicate losses despite profits earned in that year. Holding in favour of the Revenue, the Court did not interfere with the orders under Section 281B. In this context, while interpreting this provision in Society for Integrated Development in Urban and Rural Areas v. Commissioner of Income Tax and Anr. [2001] 252 ITR 642 (AP), the Court noted that there must be "reasonable apprehension that the assessee may default the ultimate collection of demand, i.e., likely to be raised on completion of the assessment". The power under Section 281B must not be invoked unless there is sufficient and relevant material on record to prove that the assessee is about to dispose of the property to thwart the collection of tax liability. [Raghuram Grah P. Ltd. and Another v. ITO [2006] 281 ITR 147 (All)]. Mr. Ganesh, senior counsel for the assessee had argued that ordinarily the principles applicable to Order XXXVIII, Rule 5 Civil Procedure Code (CPC) which empowers a court to attach property before judgment, would be applicable to AOs who exercise powers under Section 281 of the Act. In this context, it is asserted that unless the authority or court (in this case the AO) concludes on the basis of materials on record, that there is a real danger or likelihood of the assessee fleeing his jurisdiction or squandering or frittering away its assets, the order under Section 281B should not be invoked, because it would place severe and impossible restraints on the commercial functioning of the assessee.