The Madras High Court ruled that an Income Tax Recovery Officer (TRO) must lift attachment orders on a taxpayer’s property once the subject-matter issue has attained finality at the appellate level.
The High Court’s decision against a writ petition filed by M/s Sritharani Infraa Developers Pvt. Ltd., impugning an attachment order dated July 15, 2022, passed by the respondent Tax Recovery Officer, TRO Central 2, Chennai, contending it to be unreasonable, illegal, improper, and in gross breach of principles of natural justice, and consequently.
From 8 – 13 December 2016, the petition is liable for the search operations which have been directed to the passing of the assessment orders for the AY 2012–13 to 2017–18 on February 6, 2020.
The Assessing (AO) officer has made new additions for AYs 2015–16 to 2017–18, and the assessments for 2012–13 to 2014–15 recorded nil additions. The additions that partly allowed the appeal and set aside the new additions made by AO have been contested by the applicant before the Commissioner of Income Tax (Appeals) ( CIT(A) ).
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Before the Income Tax Appellate Tribunal (ITAT), the department appealed, which validated the order of CIT(A). Even after the confirmation from the appellate authority, TRO kept the attachment proceedings, which were directed to the present petition.
S.R. Rajagopal is representing the petitioner, Vaibhav R. Venkatesh. He said that TRO will lift the attachment once the factual closure made by ITAT is rendered and given effect to.
The counsel put reliance on earlier Madras High Court decisions, including Sri Lakshmi Brick Industries vs. Tax Recovery Officer and others (2013) and Coromandel Oils P. Ltd., vs. Tax Recovery Officer and others (2017), to argue that the case is no more res integra and settled by the very same High Court earlier.
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The respondents’ representatives, A.P. Srinivas and A.N.R. Jayaprathap, claimed that a conclusion had not been reached because the department had the objective to submit an appeal and was in the process of the same, but the counsel accepted the statutory position under the specified law.
The regulatory scheme and the decision in Coromandel Oils (supra) have been analysed by Justice Krishnan Ramasamy to repeat that where an appellate forum (ITAT) has adjudicated on facts and the order has been given effect to, the TRO needs to revise or cancel the recovery certificate and lift the attachment.
Subsequently, the Madras High Court kept the precedence with its earlier ruling asked that the tax recovery officer lift the attachment of property in 4 weeks. The court held that the department can pursue recovery if the same succeeds in further proceedings.
| Case Title | M/s Sritharani Infraa Developers Pvt. Ltd. vs. Tax Recovery Officer and Others |
| Case No. | W.P.No.29210 of 2025 |
| For Petitioner | Mr S.R.Rajagopal, Mr Vaibhav R Venkatesh |
| For Respondent | Mr A.P.Srinivas, Mr A.N.R.Jayaprathap |
| Madras High Court | Read Order |
