Attachment Order Issued by Income-tax Authorities :
The credit balance in the account of a customer of a banker may be attached by the Income-Tax authorities, if the former defaults in making payment of the tax due from him. Section 226 (3) of the Indian Income- Tax Act, 1961, authorizes the Income-Tax Act, 1961, authorities the Income Tax Officer “to require by notice in writing any person from whom money is due or may become due the assessee or any person who holds or may subsequently hold money for a or account of the assessee, to pay to the Income-Tax Officer an amount equal to or less than the amount of such arrears.” Thus, the order of the Income-Tax Officer may attach (i) any debts due and payable, (ii) debts due but not payable on the date of the receipt of the notice, and (iii) any amount received subsequently. Balances lying in a joint account may also be attached even though the notice is issued on a single account. The share of the joint holders in such account shall be presumed, until contrary in proved, to be equal. Thus the amount to the credit of a joint account may be attached pro rata irrespective of the fact that the joint account is payable to ‘either or survivor’ or otherwise.
This section makes it obligatory for every person to whom such notice is issued to comply with such notice. In case of a banking company, it shall not be necessary for any pass book or deposit receipt or any other document to be produced for the purpose of any entry, endorsement, etc., before payment is made. After making payment as required under this section, the banker shall be fully discharged from his liability to the assessee to the extent of the discharged from his liability to the assessee to the extent of the amount so paid. But if he fails to make payment, he shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realization of such amount. The banker should, therefore, comply with such order. His obligation towards his customer is reduced to that extent.