Law:

Section:

Section 281B of the Income-tax Act, 1961 - Provisional attachment to protect revenue in certain cases - Intimation was sent to bank stating that as provisional attachment order under section 281B was passed against petitioner, it was ordered that petitioner was prohibited and restricted from receiving sum from bank declared by her under High Denomination Notes (Demonetisation) Ordinance, 1978 - Petitioners' case was that on 26-9-1978 i.e., last day of period of six months contemplated under section 281B(2), ITO had purported to pass another order extending period of provisional attachment for a further period of six months which could be extended only by Commissioner - It was found that though proposal of ITO to extend period was approved by Commissioner, yet there was no order by Commissioner himself that period of provisional attachment should be extended by a further period of six months - Only possible reason for extension of time which emerged from documents was as enquiry was still pending - Commissioner did not appear to have found out why inquiry was still pending and how long inquiry was likely to take - Whether appropriate order for extension of period of provisional attachment as contemplated by proviso to section 281B(2) had not been passed in instant case by officer concerned, and in manner in which and after satisfying conditions precedent which are prescribed by proviso - Held, yes - Whether under these circumstances, it was obvious that period of provisional attachment expired by efflux of time on 26-9-1978 and, therefore, it was obligatory on bank to pay to petitioner amount in exchange for high denomination notes - Held, yes FACTS The petitioner was carrying on business of diamond cutting. During the relevant accounting year, the petitioner received a demand draft of Rs. 65,000 and the same was negotiated by her with one 'V'. After taking the discount, V paid the amount of Rs. 65,000 in High denomination notes to the extent of Rs. 56,000. On 19-1-1978, the petitioner deposited the amount of Rs. 56,000 along with the declaration of deposit with the Bank and the petitioner had also notified the Bank about her own personal bank account into which…

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