Recovery Officer Can't Attach Taxpayer's Overdraft Account With Banks By Exercising Power U/s 226(3): Himachal Pradesh HC Quashes Attachment Order

The Himachal Pradesh High Court ruled that a recovery officer cannot attach a taxpayer's overdraft account with banks while exercising power under Section 226(3) of the Income Tax Act. The court quashed an attachment order, stating that an overdraft account represents a loan from the bank to the taxpayer, not available funds, and thus cannot be subjected to attachment. This decision clarifies the limitations of recovery actions and protects taxpayers from improper use of recovery powers by tax authorities.