Section 34C. Provisional attachment to protect revenue in certain cases

CHAPTER VIII MISCELLANEOUS 1 [ 34B. Transfers to defraud revenue to be void.— (1) Where, during the pendency of any proceeding under this Act or after the completion thereof, but before the service of notice under rule 2 of the Second Schedule to the Income-tax Act as made applicable to this Act by section 32, any assessee creates a charge on, or parts with (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever) the possession of, any of his assets in favour of any other person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of the completion of the said proceeding or otherwise: Provided that such charge or transfer shall not be void, if it is made— (i) for adequate consideration and without notice of the pendency of such proceeding or, as the case may be, without notice of such tax or other sum payable by the assessee; or (ii) with the previous permission of the[2] [Assessing Officer]. (2) This section applies to cases where the amount of tax or other sum payable or likely to be payable exceeds five thousand rupees and the assets charged or transferred exceed ten thousand rupees in value. Explanation. —In this section, "assets" means land, building, machinery, plant, shares, securities and fixed deposits in banks to the extent to which any of the assets aforesaid does not form part of the stockin-trade of the business of the assessee. 34C. Provisional attachment to protect revenue in certain cases.— (1) Where, during the pendency of any proceeding for the assessment of net wealth or for the assessment or reassessment of net wealth which has escaped assessment, the[2] [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 3[Chief Commissioner or Commissioner], by order in writing, attach provisionally any property belonging to the assessee in the manner provided in the Second Schedule to the Income-tax Act as made applicable to this Act by section 32. 4[ Explanation. —For the purposes of this sub-section, the proceedings under sub-section (5) of section 37A shall be deemed to be proceedings for the assessment of any net wealth or for the assessment or reassessment of any net wealth which has escaped assessment.] (2) Every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1): Provided that the[3] [Chief Commissioner or Commissioner] may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so however, that the total period of extension shall not in any case exceed two years: 4[Provided further that where an application for settlement under section 22C is made, the period commencing from the date on which such application is made and ending with the date on which an order under sub-section (1) of section 22D is made shall be excluded from the period specified in the preceding proviso.]] 1. Subs. by Act 41 of 1975, s. 98, for section 34B (w.e.f. 1-10-1975). Earlier section 34B was inserted by Act 46 of 1964, s. 31 (w.e.f. 1-4-1965). 2. Subs. by Act 4 of 1988, s. 127, for "Wealth-tax Officer" (w.e.f. 1-4-1988). 3. Subs. by s. 127, ibid., for "Commissioner" (w.e.f. 1-4-1988). 4. Ins. by Act 26 of 1988, s. 62 (w.e.f. 1-4-1988).