Defining Contours of Freezing Orders Issued U/S 132(9B) of the Income Tax Act

Aditya Singh Chauhan, National Law University, Jodhpur

 Introduction

There is an increase in the number of freezing orders, whereby the tax authorities recover the amount due directly from the bank account of the tax payer.[1] This is due to the overwhelming amount of tax defaults, and increase in the pressure on the tax department.[2] One such provision that allows the tax authorities to issue freezing orders – section 132(9B) of the Income-tax Act, 1961 (“Act”) – was introduced by the Finance Act, 2017 to ensure that the revenue’s stake over the assessee’s assets is not unfairly misappropriated.[3] Such orders, however, are intrusive and have severe consequences on the business and reputation of the tax payer. The situation becomes more indiscriminate when such orders are issued against the foreign assets of the companies that are resident in India.

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