Facts of the Case

The petitioner, Saumya Chaurasia, approached the Delhi High Court challenging the attachment of her bank account pursuant to an attachment notice dated 22.07.2024 issued under Section 226(3) of the Income-tax Act, 1961. The petitioner contended that the attached account was a salary account in which only subsistence allowance from her employer was being credited, rendering her unable to meet basic living expenses. She also challenged an order dated 30.07.2025 passed by the Tax Recovery Officer and sought protection pending consideration of her stay application against recovery proceedings.

During the proceedings, the Revenue placed on record a communication dated 03.09.2025 and subsequent correspondence addressed to the Branch Manager, State Bank of India, clarifying that subsistence allowance credited to the petitioner’s bank account stood excluded from the purview of attachment under Section 226(3), read with the proviso to Section 226(2) and Section 60 of the Code of Civil Procedure.

Issues Involved

Whether subsistence allowance credited to a salary bank account can be attached under Section 226(3) of the Income-tax Act, whether continuation of bank attachment in respect of such subsistence allowance is legally sustainable, and whether the petitioner was entitled to directions for expeditious disposal of her appeal/revision against the stay order.

Petitioner’s Arguments

The petitioner argued that attachment of her salary account had effectively deprived her of access to subsistence allowance, which is protected from attachment under law. It was submitted that such attachment caused grave hardship and was contrary to statutory protections. The petitioner further submitted that her stay application against recovery proceedings was pending before the competent authority and sought directions for its time-bound disposal.

Respondent’s Arguments

The Revenue submitted that, upon verification, it was clarified that subsistence allowance is excluded from attachment under Section 226(3). The Revenue placed on record communications issued to the concerned bank explicitly directing that amounts credited as subsistence allowance be released from the effect of the attachment, while clarifying that attachment would continue to apply to any other amounts or to other bank accounts maintained by the petitioner. The Revenue also assured the Court that the petitioner’s appeal/revision would be decided within a stipulated time.

Court Order / Findings

The Delhi High Court took on record the Revenue’s clarification that subsistence allowance credited to the petitioner’s bank account is excluded from attachment under Section 226(3) and that necessary instructions had been issued to the bank to permit operation of the account to that extent. The Court noted the assurance given by the Revenue that the bank would be ensured to comply with the said clarification. The Court further recorded the statement of the Revenue that the petitioner’s appeal/revision before the Principal Commissioner of Income Tax would be disposed of within an outer limit of eight weeks.

Important Clarification

The Court clarified that while subsistence allowance is protected from attachment, the attachment in respect of any other amounts credited to the account, as well as other bank accounts including savings, fixed deposits, or recurring deposits, would continue to remain in force in accordance with law.

Final Outcome

The writ petition was disposed of. The Revenue’s clarification excluding subsistence allowance from the effect of the attachment under Section 226(3) was taken on record, and directions were issued to ensure that the petitioner is permitted to operate her bank account to the extent of subsistence allowance. The Revenue was also directed to ensure time-bound disposal of the petitioner’s appeal/revision by the competent authority. The pending application was disposed of as infructuous.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1769681333_SAUMYACHAURASIAVsASSISTANTDEPUTYCOMMISSIONEROFINCOMETAX.pdf

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